Wire fraud schemes are evolving, and scammers are finding new ways to infiltrate real estate transactions—including exploiting virtual meeting platforms to dupe home buyers and sellers. A hacker may break into an email account and invite your client to a virtual meeting. How will the client know he or she is being targeted by a scammer? Typically, the hacker will use a still picture, claim to have audio and video issues and then direct the client to initiate a fraudulent wire transfer, warns Charlie Lee, senior counsel and director of legal affairs for the National Association of REALTORS®, in the latest Window to the Law video.
A real estate agent, lender, attorney, buyer, seller or another party to the transaction could have their email hacked by a scammer who then poses as them. Victims who fall for these scams could lose the funds they’ve saved over their lifetime to move forward with a home purchase. Some real estate professionals have been named in lawsuits brought by clients who say their agents failed to prepare them for possible wire fraud scams adequately.
“Real estate is an attractive target for cybercriminals to steal large sums of money,” Lee says in the video. “Wire fraud usually involves a cybercriminal compromising a business or personal email account and sending the buyer or another party, in the last minute, a convincing yet fraudulent instruction to wire money to the wrong account.”
Lee urges real estate professionals to take the following steps:
- Talk to your clients and staff about the dangers of wire fraud scams and how to avoid them. Several REALTOR® associations have developed wire fraud notices for their members to use. Some require the client’s signature after reviewing. View examples.
- Tell clients to always verify wire instructions in person or through a known, trusted phone number. Do not trust wire instructions provided by email.
- Learn best practices for strengthening your cybersecurity both at home and in the office.
- Review your E&O and cyber liability policies. Ensure that you have sufficient coverage in case an incident occurs.