Marsha, I’ve been hearing more and more about email hackers and real estate scams. Is the problem getting worse? How do the scams work?
Real estate fraud is an old problem. It’s been with us as long as we’ve had land, con artists, and trusting people. (Look up George C. Parker and his “sale” of the Brooklyn Bridge.) The current email frauds are different from the old con games in that the crooks are not exploiting greed, but rather gathering information to deceive the key players in real estate transactions.
This real estate scam goes after real estate funds via email hacking. They may target different entities; the seller of the property, the buyer, the real estate agent, financial institutions or the escrow company. It’s not a new scam but it has grown exponentially and with tremendous success in recent years.
The scammers, from anywhere in the world, hack into a real estate agent’s email. How do they do that? With great ease. Real estate agents are highly visible professionals. We want everyone to know who we are and market ourselves heavily. We have websites, Facebook pages, print ads, our faces on grocery carts, bus benches and anywhere we believe a potential client may find us. The majority of agents don’t use encrypted emails. Real estate agents are a prime target for hacking.
The bad guys break into an agent’s email and identify what active transactions they are currently engaged in. From these emails the crooks discover everything. They learn the names of the buyers, sellers, the escrow company and the agents. They obtain the relevant email addresses for the transaction. Using this information they send fraudulent email messages. This is known as phishing. These emails appear genuine and will always direct the recipient to send money to the defrauders.
Here’s an example scenario that shows how the sophisticated scoundrels acquire the money. The phishers send a false email from the escrow company to the buyer with fraudulent wire transfer instructions. The message tells the buyer where to send their settlements funds. The crooks may also send an email to the escrow company with instructions where to wire the seller’s proceeds from the sale. The sellers never receives their money. The scoundrels might also steal from the real estate agent. Once again, they send bogus instructions to the escrow company on where to wire the agent’s commission checks.
How to prevent being scammed and defrauded? There are several ways. You need to have top of the line firewalls and anti-virus technology. Change usernames and passwords as often as possible, and clean up your email accounts often.
Finally the best way to prevent wire fraud is to verify all last minute instructions. Pick up the phone and call the alleged sender. Use the phone number you’ve been using for the entire transaction, not the one provided in the email. Remember to verify, verify, verify. Don’t let anyone take your hard-earned money.