Real estate wire fraud has long been a problem and it is only becoming more frequent and worse. Home buyers MUST be on the lookout for this scheme as they stand to loose substantial amounts of money that usually cannot be recovered.
Here is how the scheme works
The thieves either hack into an email account associated with the realtor, agent or mortgage lender. Phishing is typically how they gain access. Sometimes they use a technique called spoofing. Either way, the home buyer receives what appears to be a legitimate message at just the right time in the purchasing process. The email asks the buyer to wire funds related to the purchase to a bank account. Unfortunately that bank account belongs to the scammer and has nothing to do with the purchase. Once that transfer is made, the funds are typically not able to be recovered and the buyer is solely responsible.
Aaron and Lindsey Fisher found a home they loved. They found a realtor and began the purchase process. They were having an email conversation with his real estate agent and legitimate representatives from the title company. Hackers somehow inserted themselves into the conversation, using email addresses designed to look like one or more of the participants in the deal.
Documents compiled by the Fishers show the fraudsters emailed digital copies of the real closing documents and wire instructions that looked real from the fake email account. “These were the real closing docs. And so, I opened the PDF. I inspected them. All the numbers were right,” Aaron said. However, the attached wiring instructions contained the wrong account information. “Somehow, the fraudsters had got hold of the real closing documents. And so that gave them some comfort, that this was a genuine email,” said Paul Llewellyn, an attorney who represented the Fishers.
The Fishers’ money was wired to a real account number, but the account name on the fraudulent wiring instructions, Schlossberg & Associate, LLC., appears to have been made up. The money Aaron Fisher wired to what he thought was the mortgage company was ultimately diverted across the globe to China, according to a source close to the case.
How to protect yourself
Communication is vital. It is important to know everyone who is involved in the closing process, this includes your lender, your real estate agent, your attorney and your settlement agent. Never wire any money without making a phone call to confirm the legitimacy of a request to do so and then confirm the account information. Make sure it is a call that you initiate.
Never respond with a wire transfer to a phone call that you did not initiate. Scammers have used this technique instead of email in order to triack buyers. If you receive a call soliciting a wire transfer, tell them that you are going to confirm the request. Then contact those people that you know are involved in the closing process.