August 15, 2017

Buying a Home in the U.S.? Protect Yourself from Wire Fraud

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Aug

15

Buying a Home in the U.S.? Protect Yourself from Wire Fraud

Posted by: Bruce Perlman, Senior Vice President and General Counsel

Summer is the busy season for residential real estate transactions in the U.S. for a variety of reasons. The kids are out of school, buyers and sellers can more easily use their vacation time to pack or unpack, and the weather poses fewer complications. You know this, your real estate agent knows this, and unfortunately, so do the scammers.

The bad guys have become incredibly good at identifying people engaged in residential real estate. Real estate brokers and agents, mortgage officers, title and escrow closers, and real estate lawyers; the list goes on and on. For relocating employees on fast deadlines, this information can be critical.

What types of scams do you need to be on the lookout for? 

Spoofing and phishing are both tricks of the scammers’ trade. A scammer who has been able to identify and infiltrate the email of a legitimate real estate agent will set up an email account that looks remarkably similar to the agent (“spoofing”); joe.realtor@realestatecompany.com becomes joe.realtor@realstatecompany.com. The email might even contain Joe’s company logo and contact information. Sometimes there are attachments, and sometimes not. It will probably look very genuine.

The scammer uses this email account to contact you, the homebuyer, with a very official looking email telling you to wire your deposit money to a specific bank account (“phishing”) belonging to the scammer. Once you do this, there is a very high probability that your money is lost. Unless you can engage your bank or law enforcement very quickly, chances of recovering your money are slim.

What can you do to protect yourself from scams? 

The best advice from the government, banks, and others, is to be vigilant and prevent the problem before it happens. Just a few notes:

  • Reputable real estate professionals do not normally email wire instructions or other bank account information. If you receive an email like this, call your real estate agent, your lawyer, or whomever the sender claims to be. Do not use the phone number that might be in the email as it will connect you to the scammer. Similarly, don’t “reply” to the email to ask “Joe” if it is legitimate. You will not be reaching “Joe.”
  • If you get such an e-mail, do not wire the money and do not email financial information to anybody. Call your mortgage representative or your real estate broker and verify any inquiry.
  • Once you’ve verified any inquiries as legitimate on any wire that you send, contact the recipient to be sure they received it.
  • On anything unusual, contact all banks and law enforcement as soon as possible. It may sound dramatic, but call the FBI right away. They have tools available that can sometimes reverse such wires—but only if you act quickly.

It is remarkably easy to get numb to this kind of information. Most of us have heard the advice dozens of times and figure we are too smart to fall for something like this. Given the speed of email and wires, a mistake will cost you dearly. Additionally, it is entirely possible to lose so much money in one of these scams that you can no longer afford to buy the home. If that were to happen, you need to also be aware that the home seller might still seek to legally enforce the terms of the sales agreement.

Cartus does not use email to communicate wire instructions with a buyer or transferring employee or anyone else. Cartus’ Broker Network and Cartus’ affiliate, Title Resources Group, both operate under the same strict rule. If you receive a communication like this from a Cartus-related party, contact Cartus right away. If you’ve already sent the wire, contact your bank and the FBI first.

While all of this sounds hyper-dramatic, the risk is real and the losses are huge. Below are links to additional resources providing further information on this topic. The National Association of Realtors (NAR) piece listed below is most aligned with residential real estate, and the FBI piece gives a sense of the size and scope of scams like this.

Additional Resources:

National Association of Realtors: https://www.nar.realtor/articles/urgent-alert-sophisticated-email-scams-targeting-the-real-estate-industry

Consumer Finance Protection Board: https://www.consumerfinance.gov/about-us/blog/buying-home-watch-out-mortgage-closing-scams/

FBI: https://www.ic3.gov/media/2017/170504.aspx

U.S. Department of Treasury: https://www.fincen.gov/resources/advisories/fincen-advisory-fin-2016-a003

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Posted By

Bruce Perlman

About Bruce

Bruce joined Cartus in 1991 and was named senior vice president and general counsel in 2001. He has lectured extensively and written many articles on tax and legal topics related to global relocation issues.

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