The FBI and the National Association of Realtors and have issued warnings about “sophisticated email scams targeting the real estate industry." The latest scam involves online criminals, who impersonate real-estate agents, title companies, lenders, lawyers or transaction coordinators. The scammers’ goal: to trick buyers into wiring their down payments into offshore accounts.
The criminals hack into the email account of someone at a real estate firm working with clients and then monitor the person’s correspondence. Fraudsters wait until the person is about to close on a deal and then they send the buyer bogus money-wiring instructions using the agent’s name, tricking the would-be homeowner into transferring their hard-earned money to the thief.
The high rewards and low risk of getting caught appeal to scammers. The median home sales price is currently $223,900, for example, so a 30% down payment would net $67,170 for the criminals. Unfortunately for homebuyers, the scam is usually only discovered when the closing agent or title company tells the buyer or financial institution that they did not receive the down payment.
“One mistake could cost you your life savings,” Al Sargent, Sr. Director of Product Marketing at OneLogin, a security technology company, told MarketWatch. “And there is little-to-no recourse to be taken. Hackers are attracted to it because it’s a lot of money protected by very little security — this is like banks shipping money around in a convertible instead of an armored vehicle.”
How can you avoid being scammed?
Because it's extremely difficult—and unlikely—you'll recover your money in the event you're scammed, it pays to focus on what you can do to prevent becoming a victim in the first place. Here are some steps you should take before transferring any funds to close out a deal on a new home.
Keep calm and carry on. Criminals take advantage of homebuyers being vulnerable because home closings are filled with tight deadlines and high emotions, so think rationally before you act when it comes to wiring anyone a down payment. Is your normally calm realtor sending you an email demanding you transfer money for a down payment within the hour or else the deal disappears? That sudden change of personality should give you pause before you rush to transfer tens or hundreds of thousands of dollars.
Take a look at the details. Check the email message for poor grammar and misspelled words. Be suspicious of any email that was sent outside of normal business hours. An email sent at 6 pm might not raise any eyebrows, but one fired off at 3am definitely should. Also make sure the address from which the email was sent is one you recognize.
Call your agent. You should phone your real estate agent or the person involved in the real estate transaction who has sent you the email. Use the phone number on your agent’s business card and not the phone number on the email signature because the scammer may have changed the phone number in the email.