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Beware of real estate wire fraud schemes

On Behalf of | Dec 8, 2020 | Real Estate Transactions, Residential Real Estate |

Every day, the real estate industry in the United States sends and receives hundreds of thousands of dollars in wire transfers for the purchases of property. In most cases, these transfers occur routinely without any problems.

But the rise in cyber crimes has drawn hackers to the field of real estate seeking to intercept and redirect these money transfers for their own illegal and nefarious purposes.

How big of a problem is real estate wire fraud?

In 2018, there were roughly 11,300 victims of real estate wire fraud. The fraudsters perpetrated these crimes by using fake email addresses, in most cases. Sadly, Florida is one of the targeted states for real estate wire fraud because of all the high-end property located in our state.

The National Association of Realtors (NAR) said the above figure was a 17% uptick from 2017. Over $150 million was lost to these cyber criminals in that year alone.

The FBI reports that thus far in 2020, consumers have had over $220 million stolen in various real estate wire fraud schemes, another 13% increase from 2019.

How it goes down

Funds in escrow for the purchase of property are typically wired from the buyer’s bank to the seller’s. But if someone hacks into the email system, that money can be misdirected by the criminals.

For instance, the thieves can pretend to be the closing attorney, title company or the real estate agent. Under this guise, they send a phishing email to the buyers substituting their own bank account and routing numbers. When the funds are transferred, they collect, close the account and disappear until they scam another victim.

How you can prevent this fraud

No one wants to go through such a traumatic experience and lose their home-purchase funds to a thief. Working closely with your real estate attorney can reduce the likelihood of your being the fraudster’s next victim.

Whenever you receive an email or other communication like that, place a call to your real estate attorney to verify that this is not just a phishing attempt to rob you blind. Your attorney can verify the legitimacy of the email and/or alert law enforcement to the attempted fraud.