Las Vegas Real Estate News

Real Estate Wire Fraud Is On The Rise

The Scam:

A hacker intercepts an email from one or more parties to a real estate transaction that includes the wiring instructions for home purchase. The criminal then changes the destination bank and creates an email address that looks a lot like that principal in the transaction. The buyer's bank will transfer funds thinking they're completing a transaction. In reality, they're transferring funds to the hacker's bank account or some other place where the money will never be seen again.

In a recent court case, Bain v. Platinum Realty LLC, the US District Court in Kansas upheld a ruling that the seller's real estate agent was 85% responsible for the loss of a buyer's money.

The Solution:

There are a number of steps that need to be taken to ensure that no one loses money on a real estate transaction:

1. Buyers and sellers need to be advised from the outset that no money should be transferred by following the instructions in an email, ever! Buyers' and sellers' agents, as well as bank officials, need to tell the parties to a transaction.

2. Bank employees need to ask where the buyer got the instructions they're following. If it was not hand-delivered by their real estate agent, then the bank should refuse to transfer the money.

3. Everyone involved in the transaction should call the other principals anytime there's to be a transfer of funds. The bank should call the buyer's agent and the seller's agent and confirm transfer bank account numbers and amounts.

4. Buyers need to be aware that no money should ever trade hands without all the verifications in place. Sometimes, buyers will get frantic emails instructing them to transfer funds "so they don't lose their house", etc. No money changes hands without a complete round of verifications of everyone in the sale.

5. Every device that a real estate agent and/or broker uses needs to have state-of-the-art malware protection. It's malware that allows a hacker to intercept emails, copy and scam emails, and gain access to the entire process.

Avoiding almost every financial scam involves one simple tool: the telephone. Take the time to call the people in the transaction to make sure that bank account numbers are right and that the transaction is required. These calls can take just a few minutes, but can save hundreds of thousands of dollars.

Americans lost $150 million in real estate scams in 2018, according to the FBI. Real estate professionals are at the top of the list of victims of malware attacks.

With the increase of real estate wire fraud, here are some steps you can take to help prevent it.

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