The real estate industry has recently been a primary target of wire fraud. Buyers have lost hundreds of thousands of dollars as a result. Fortunately, there are steps that you, your agents and your buyers can take to protect everyone from fraud.
Typically, wire fraud scams begin when a hacker gains access to a real estate agent’s email account. The hacker observes the agent’s communications in order to learn about any upcoming transactions. By closing, the hacker has gained enough information to send a seemingly legitimate email to buyers, notifying them of a supposed change to the wire instructions. Posing as the agent or title company, the hacker instructs buyers to wire their closing funds to a new account. Typically, the wired money is gone before anyone realizes it’s been sent to the wrong place.
When people aren’t aware of the potential for wire fraud, it’s easier for these schemes to succeed. Be sure your agents have a full picture of the potential tactics used in wire fraud scams. Encourage them to incorporate discussion of wire fraud early on in conversations with clients.
If you haven’t already, set a policy in your office to never use email for relaying sensitive information to clients. If your agents establish this fact with buyers from the beginning of the relationship, an email with wire instructions should set off alarm bells.
As an additional measure of security, agents should instruct buyers to call the intended recipient prior to wiring any funds. They should verify the phone number independently of any email messages they’ve received, as some hackers have gone as far as to incorporate their own phone numbers into a realistic-looking signature block at the bottom of fraudulent emails.
Of course, there are steps that you and your agents can take to prevent hackers from accessing your information in the first place. Diligently follow good email safety practices, such as using strong passwords and changing them frequently. Never use free WiFi or free email accounts for business communications. Clean up your email account regularly, keeping only what you currently need and saving the rest in a separate, secure location.
If your office doesn’t already have a data security plan, it’s imperative to establish one. NAR’s Data Security and Privacy Toolkit, found on realtor.org, provides guidelines, checklists and examples that can help you create or revise a data security plan of your own.
REBAC members can find more on the subject in the REBAC Webinar, “Wire Fraud Scams: How to Protect Your Buyer Clients,” available in the Member Center section of the REBAC website. Working together with your agents and buyers, you can avert wire fraud.
For more information, visit www.REBAC.net.