Warning! Crafty criminals are utilizing the latest technology and other tricks to wreak havoc on a global scale, so it’s more important than ever to take steps to protect yourself. Hackers can cause all sorts of headaches in their quest to steal your hard-earned money, especially during the home-buying process.
In this ongoing digital transformation, millions of consumers are now completing their major financial transactions entirely online, a great convenience, but also creating new vulnerabilities for wire fraud.
Can you spot this type of real estate scam before you become a victim? Read on to learn all about these malicious attacks and how you can avoid them.
Cybersecurity experts are constantly fighting what they refer to as “social engineering attacks.” This is a strategy that threat actors use to get around online protections by leveraging the propensity for human error.
One type of social engineering offensive is phishing. The earliest hackers were known as “phreakers” due to their abuse of the phone system, and they coined this term to claim responsibility. Phishing was first encountered in the message rooms of AmericaOnline (AOL), back in the mid-1990s.
Then, phreakers would pose as AOL employees and send other users an instant message asking them to verify their billing information. People would happily send back their credit card numbers… and get robbed.
Even though phishing has been around for almost three decades, it hasn’t really changed all that much. This approach still plays a huge role in today’s rapidly growing internet-enabled crime wave, and even global megacorporations aren’t safe.
Phishing is also a key component of almost every real estate and mortgage scam.
How it’s used
It can happen when you’re trying to buy a home, looking to refinance, or any time your personal information and large exchanges of money are involved.
Scammers love to target real estate professionals in the hopes of breaking into their email or website and finding out about lucrative upcoming deals. The con artist can then send spoof, but amazingly realistic, emails, impersonating escrow agents, lawyers, or other trusted persons, with fraudulent instructions for wiring funds during the closing process.
These kinds of scams are often orchestrated by sophisticated organized crime groups and if the funds are transferred to offshore accounts, they can be extremely difficult to recover. Many unfortunate individuals have forfeited their life savings through phishing and wire fraud — as well as their dreams of finally owning a home.
In 2021 alone, victims of this trick lost over $2 billion.
Avoid getting caught in their trap
Crimes like this have become more common, but by being smart and taking these common-sense precautions, you can hopefully dodge these sneaky traps and close on your home without a hitch.
- The best way to protect your assets is to do your due diligence. Understanding each moving part involved in your closing procedure is critical.
- Familiarize yourself with the various parties, your mortgage broker, and your title company. Confirm the identities of your trusted agents and know their process for the transfer of funds through wire transfer.
- Only open an escrow account with a reputable firm, and don’t share that account information with anyone online.
- Never follow instructions regarding the transfer of money that have been sent via email. Always call to verify your closing instructions with a trusted agent, using a previously agreed upon phone number, or by looking up the phone number on their website. Many reputable title companies no longer use email to send these at all, to help prevent these crimes.
- Don’t use the phone number listed on the email, it could be fake. Scammers may also try to call you directly and ask for your financial information. If anyone does, offer to call them back.
- Don’t click links or open attachments contained in emails — they could contain harmful ransomware.
- Be wary of last-minute requests or changes. Hackers rely on causing panic and confusion to perpetrate their schemes. If you get an email demanding that you “act fast” and send payment immediately, contact your trusted agent. Closing is a weeks-long process.
- Practice online safety and good cyber hygiene. Install antivirus software, use a VPN, enable multi-factor authentication, and set strong passwords that you change frequently.
What to do
If you think you might be a victim of wire fraud, don’t despair. While the criminals plotting these kinds of thefts are technologically savvy, they’re not infallible. They may already be on the radar of the US authorities or other international agencies. Time is of the essence, so make sure you take these steps as soon as possible.
The very first thing to do is to reach out to your banking or financial institution and ask for a SWIFT recall. Request that they contact the receiving company to report a fraudulent transaction.
Call your closest FBI office to file a report. Consult with the office of your state’s Attorney General and your local law enforcement. Even though the majority of wire frauds and mortgage scams take place across state lines or from other countries, they may be able to put you in touch with cybercrime investigators who can help you get your money back.
Speak out and let your closing team know what’s happening. If a hacker was utilizing phishing tactics to send fake closing cost transfer instructions, others could be at risk.
Your trusted agents
By being vigilant, you can guard yourself and your family against wire fraud and other real estate scams. While phishing has been around for 30 years, the dark web is a continuous source of new malware and cybercrime tactics.
It’s wise to take security measures and adopt IT best practices for keeping your personal and financial information safe. A little preparation can go a long way towards protecting your identity and assets.
Buying a piece of property is not only a major financial decision, it should be a joyous time in your life. At Landtrust Title Services, we’re more than just highly qualified real estate experts. We are your trusted partners throughout the entire home-buying journey.
With our concierge service and personalized support, you’ll always have a trusted agent by your side. We welcome your questions — reach out today!