Wire fraud is a real threat for anyone looking to buy or sell a home but with the advent of AI and the sophistication of technology, fraud is on the rise. According to CertifID’s report, nearly one in four consumers say they were targeted by fraud attempts during their real estate closing process, The median amount they lost exceeded $70,000, whether that was buyers whose down payments were stolen or sellers who lost their net proceeds to fraud. Real estate is especially vulnerable to fraud because data is readily available online and in public records. It also involves large sums of money and many different players who are interacting for the first time.
How does wire fraud occur? A fraudster may pretend to be an escrow officer or an agent. They may send an email that looks like it is coming from your agent or your title company or they use AI to call you. An alleged agent or escrow officer may tell you that there was a change in the wire information and they ask you to wire your money to an updated account. If you don't check first, you could be sending money directly to the scammer. BE CAREFUL!
On the flip side, they may claim to be an owner of a property and attempt to sell the property, usually land lots. Common red flags include "out of town" sellers, a willingness to sell the property for less than market value, and remote signers. Title companies are making every effort to verify ownership during the transaction and they attempt to send a letter to the owner of record to ensure that the "seller" is the actual owner.
Here are some great reminders about wire fraud from my partners at Old Republic Title. We always advise that when you receive an email, you call the title company with a number you have been given from you agent. DO NOT use the phone number provided in the email nor reply to the email.
BE WARY of free, web-based email accounts; they are easily hacked. ALWAYS VERIFY changes in payment instructions and confirm requests for transfer of funds. CAREFULLY EVALUATE any requests for secrecy or pressure to take action quickly. CALL, DON'T EMAIL: Confirm all wiring instructions by phone before transmitting funds. Use the phone number from the title company's website or a business card. BE SUSPICIOUS: It's not common for title companies to change wiring instructions and payment info.
CONFIRM IT ALL: Ask a bank to confirm not just the account number but also the name on the account before sending a wire.
VERIFY IMMEDIATELY: You should call the title company or real estate agent to validate that the funds were received. Detecting that you sent the money to the wrong account within 24 hours gives you the best chance of recovering your money. FORWARD, DON'T REPLY: When responding to an email, hit forward instead of reply and then start typing in the person's email address. Criminals use email addresses that are very similar to to the real one for a company. By typing in the email address you will make it easier to discover if a fraudster is after you.
Source: National Association of Realtors Magazine, Old Republic Title