The Billion-Dollar Industry Threatening Real Estate Transactions – How to Protect Yourself

by Cassandra Majors

Pop Quiz: What industry grew by almost a billion dollars from 2016 to 2017? Hints: You wouldn’t want to invest in it, there are no publicly traded companies participating in it, but it’s still one of the fasting growing industries in the world. Give up? The answer may surprise you: it’s wire fraud, and the scammers behind it are getting better every day and making millions of dollars off vulnerable home buyers, sellers, and Realtors. Read on to find out how to help protect yourselves and your customers from this ever-growing threat.

Here’s how the scam usually works: The criminal will impersonate someone involved in the transaction (a real estate agent, the escrow officer, the lender’s loan officer, etc.) by sending a legitimate-looking email and/or making a direct phone call with phony wiring instructions to the buyer and insisting the money be wired as soon as possible. This is not an obvious “Please help a Nigerian prince wire money to the U.S.” sort of spam email we are all used to getting. These wire fraud emails are often indistinguishable from a genuine email, complete with company logos and graphics, signature blocks, and links to the company website.  Often the emails provide a local phone number to call for verification, and when the buyers call to verify, the professional-sounding scammer answers the call and verifies the false information.

Once the funds are wired to the scammer’s account, the money is quickly withdrawn and the account closed, and there’s little hope of recovery in most cases. Many buyers across the globe have lost hundreds of thousands or even millions of dollars to these types of scams, and they have little recourse once their banks have wired out the funds at their request. These scams are so profitable and the technologies that assist them are becoming so sophisticated that more and more fraudsters are joining the effort every day, and the number of daily wire fraud attempts is skyrocketing here in Texas and all over the U.S. as a result.

So how can you protect yourself and your clients from wire fraud? There are several easy ways to help eliminate the most risk of fraud, and Independence Title takes daily measures to keep our customers safe. Here are the top 5 ways you can help protect your funds from scammers:

  1.  The best way to eliminate the risk of wire fraud is by bringing your closing funds in the form of a cashier’s check instead of wiring the funds. We’ll provide you with a statement showing the amount of money to bring for closing as soon as we’ve confirmed your settlement costs, and you’ll have peace of mind knowing you won’t be wiring your money to the wrong account
  2. If you still prefer to send your funds via wire transfer, please call a member of your escrow team for instructions. We will NEVER provide wiring instructions unless you specifically ask for them, so if you receive an unsolicited email or a phone call from Independence Title giving you wiring instructions, you can be sure it IS a wire fraud attempt. Never respond to an email like this, and simply hang up the phone if you get a call. And on that subject:
  3. Never call a phone number from an email—always go the company’s website directly (not from a link in the email) and find the phone number there to call and verify the information. Go to our website and use the easy search bar in the upper right-hand corner to find your escrow officer or closing branch, and if you’re unsure, just call the main number and someone will help you get in touch with the right team: 512-454-4500.
  4. Always check the email address from your title company, real estate agent, or lender to make sure it’s legitimate. Fraudsters are smart enough to create and use an email address that is often so close to the real email address of your Realtor or title company, you may not catch it unless you are paying very close attention, such as changing an “I” to a “1,” adding one extra letter, or changing the email service provider.
  5. Remember that our closing teams will NEVER text, email, or call you insisting that you wire your funds quickly—this is the fraudster’s trademark move. They want you to move quickly before anyone has a chance to realize what’s happening. Often the scammers will send an email or call you very near closing with urgent, last-minute changes. Our wiring instructions will NEVER change once we give them to you, our escrow bank will always be one located here in Texas, and the account name will always be Independence Title.

Independence Title encourages you to take every possible precaution to protect yourself from becoming a victim of fraud. If you close with us and follow the instructions above for safety, you can help protect your funds and your home closing transaction. These attempts now occur almost daily, so be cautious and careful so you’ll never fall victim to one of these scams.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

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