I have spoken to a few REALTORS® regarding potential scams that could cause all closing money to be fraudulently removed and place liability on the Broker/Licensee. The scammers are using e-mails that look like title company or real estate office e-mails. Therefore, a buyer will receive an e-mail from the closing agent or the real estate agent stating to wire the closing funds to the bank account the agent specifies. The money will not end up at the bank account but diverted to an offshore account by cyber-pirates who’ve hacked into your office’s e-mail account, watched agent’s communications and found the title and settlement service providers. This is happening all over the United States. The Federal Trade Commission has issued a joint warning with the N.A.R. about threats to settlement funds.
The scam works by a hacker breaking into a real estate agent’s e-mail account and looking for forthcoming closings. In the monitoring process, they learn the identities of buyers and sellers, the company names of title, escrow and settlement service providers and the timing of the scheduled closings. Then they send the e-mail with account information and request the funds be wired.
This scam can be countered and prevented. Please inform all Buyers and fellow agents, that no matter how convincing and accurate an e-mail may appear, if it provides money-moving instructions for the closing, stop immediately. The Buyer should contact the agent and title company and confirm the e-mail request and provide the information directly to the agent/title company. This should be done in writing to each client and provide a statement that “our agency will never ask you to move money in an e-mail.” Again, also remind them that it is smart practice to confirm all wiring instructions received by any means with a call to a verifiable phone contact number of the realtor or closing agent.
In addition, please ensure the best e-mail security measures are being implemented to avoid constant review of your e-mails. Change your passwords more frequently and work with your IT experts.
The legal profession has been hit with a similar scam that took about $200,000 each from two firms. The process was the same but used a fake check on Royal Bank of Canada that looked so real the local banks took it only to find out the bank account did not exist.