Thieves, Scammers, and Scaliwags- Oh My!

Thieves have hit the real estate transaction market. Yeah, no surprise there, is it? Given that we are all exposed to some degree in today’s “e”-world, every online interaction we participate in is at risk of being spammed, phished, trolled or spoofed.
But, it is easy to not realize how prevalent the risk of identity theft is during a real estate transaction. So buyer, seller, REALTOR, lender, attorney, settlement agent, appraiser, home inspector, title examiner BEWARE.
If you are buying, selling, or refinancing real estate or helping the transaction to occur, you are being targeted for fraud. Scaliwags are watching both online and for yard signs for listings, announcements of the sale of a property, and collecting information via the internet and in-person to determine when a property is being sold or financed. When they find one, they are then spamming, phishing, trolling or spoofing all parties involved in the transaction to try and gain access to personal account information in hopes of being able to steal the monies that are changing hands, be them from the lender to the borrower, or from the buyer to the seller. And if they get their grubby hands on your information they will use it to try and steal you funds.
One recent example. A settlement closing officer was contacted just prior to closing via email by a person pretending to be the seller with “new” wiring instructions. Those instructions were to have the seller’s proceeds wired to a different bank account than what had been part of the original instructions from the seller. The diligent and observant escrow officer questioned the new e-mailed instructions as she had not previously corresponded with the seller via email and the email was poorly written. To confirm the change, the escrow officer called the seller and the seller confirmed that they had not sent “new” wiring instructions. In fact, they were insistent on receiving a check for their proceeds. It was an attempt by the crook to have the funds wired to a fraudulent account. The question you probably are asking is how did the criminal know that the seller was due to receive funds just days later. As I mentioned when I started, everybody has everything online now and unfortunately the criminal element is very adept and informed on how to gain access to information that they can use to get your funds.
So, what can we do to limit the chance of fraud.
1. Be suspicious of requests(especially via email) for secrecy or pressure to take action quickly.
a. Out of Band Communication: Establish other communication channels, such as telephone calls, to verify significant transactions. Arrange this second–factor authentication early in the relationship and outside the email environment to avoid interception by a hacker.
b. Digital Signatures: Both entities on either side of transactions should use digital signatures. However, this will not work with Web–based email accounts. Additionally, some countries ban or limit the use of encryption.
c. Delete Spam: Immediately delete unsolicited email (spam) from unknown parties. Do NOT open spam email, click on links in the email or open attachments. These often contain malware that will give subjects access to your computer system.
d. Forward vs. Reply: Do not use the “Reply” option to respond to any business emails. Instead, use the “Forward” option and either type in the correct email address or select it from the email address book to ensure the intended recipient’s correct email address is used.
Significant Changes: Beware of sudden changes in business practices. For example, if a current business contact suddenly asks to be contacted via their personal email address when all previous official correspondence has been on a Company email, the request could be fraudulent. Always verify via other channels that you are still communicating with your legitimate business partner.

So, beware of the crooks. Thanks to Fidelity National Financials Fraud Insights Newsletter for providing details for the example above and for the helpful ways to avoid a scammer.

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