Wire fraud is becoming a more common crime in real estate. According to the National Association of Realtors, approximately 11,300 people fell prey to wire fraud schemes on the closing side in 2018, amounting to over $150 million. From 2015 to 2017, real estate has witnessed an over 2200% rise of monetary loss, with an 1100% rise in reported victims.
Wire fraud is a cybercrime. It occurs when someone misrepresents a deal with the intent to get the other person to buy. A scam. The instigator often does this using a fake identity. Where in the old days perpetrators had to cold call to get their next victim, the dawn of the internet made communication, and therefore cybercrimes, easier than ever. False photos, grandiose promises, and forged emails can be all you need to commit this federal crime.
A typical scammer may forge your real estate agent’s email account or phone number to convince you to send closing money to a fraudulent account. They may say there has been a mistake in the transaction or that you sent the funds to the wrong account before. They will likely make the matter sound urgent so you panic and send them your funds right away without thinking.
So how do you avoid falling prey to such crimes?
Understand the Closing Process
Knowledge is power. Talk with your real estate agent and lender about how the closing process will go step by step. Get info about how things should be wired. Ask them for their contact info in person and get them to write them down. That way, if something fishy happens, you know how things should really go and who to talk to.
If someone emails or texts you and says you need to send money right away or bust, take a minute to think about it. Don’t rely solely on wire instructions over email, and never give personal financial info over email. A scammer will do everything they can to make you believe your house is in jeopardy if you don’t send them money ASAP. So if you get such a message that seems “phishy,” call an authorized individual with the contact info you’ve gathered. They should be able to tell you the account to wire to and the amount.
If you feel you have been scammed call your bank as soon as possible and request a wire recall. You can also file a complaint with the FBI here.
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