The threat of wire fraud is real. Find out how to identify home buying scams and protect your money from scammers.
In our ever-advancing hi-tech society, much of our information is shared online and via email. Real estate transactions are no exception, with electronic signatures and online wire transfers becoming the norm. As convenient as this may be, it also creates a vulnerability that hackers can exploit.
The Federal Trade Commission and the National Association of Realtors recently issued a warning to homebuyers about email and money wiring scams. Millions of dollars have been lost because of sophisticated wire fraud scams.
Here’s How The Scam Works:
The email of a homebuyer or real estate professional is hacked by scammers phishing for financial information. The hackers scan for emails containing information about real estate transactions, learning the planned purchase date, closing date, and dollar amount needed at closing. Then they send out an email to the buyer posing as the real estate agent, title company, or escrow company involved in the transaction. They indicate there has been a last minute change or an “update” to the wiring instructions for the home purchase, and will provide the buyer with new wiring account information.
Once the homebuyer wires the funds into the scammer’s account, the account is usually cleared out in minutes, and the funds gone forever.
How To Protect Yourself Against Wire Fraud
No doubt you’ve been saving for a while and want to protect your money. You’ve done the due diligence on your target property and have spent months (likely more) researching everything for this big decision. Don’t let your guard down at the finish line. There are a few things you can do to make sure your money gets into the right hands.
- Talk to your real estate agent to understand the money transfer process before you enter into the transaction
- Don’t email financial information. It’s not secure
- If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the "s" stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself
- Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security
- Keep your operating system, browser, and security software up to date
- Call the intended recipient just before you transfer the funds to let them know you are making the transfer and to verify the wire transfer details
It’s always best to be cautious, particularly with large investments. Get as much information as you can and always verify the information you receive.
Yes, we can’t be too careful when it comes to protecting our money. I do online banking myself and I’m watchful over being redirected to a site without the https prefix. I’m also careful about the reputation of the company I’m dealing with. You might have avoided email hacking but the company’s employees may be making money of the transaction by selling information about you and the real estate deal.
You can never take enough precautions when it comes to our finances. Four years ago we had our house on the market and I had TWO people email and ask about the house. Without even coming to look at the house they wanted the house. They brought on the wire scam used through western union.. I wonder how many people fall for it.
It seems that you can never really be too careful when it comes to being a homeowner. It is amazing how the list of concerns to have just keeps getting bigger and bigger, and also more advanced. Makes it that much more important to stay vigilant and on top of your game.
It’s rather frightening how these scammers have gotten so sophisticated with their techniques… and I know that no matter how careful someone is, there could be a time when the guard is down and that one time is all it takes. I hope there will be new and better security in this area of technology real soon.
Personally after an ID theft incident a year and a half ago, I have gone back to old fashioned ways of not doing any banking or most money transactions online. It’s just too risky at this point in my eyes, and considering it already happened once and I *did* lose some money, it’s not unrealistic to feel this way…. I’ll reconsider if something is done for tighter security, but in the meantime I’ll do my banking and financial transfers by going to the bank. 🙂
Yes, sadly with such a fast technological progress there are also a lot of risks and dangers.
You listed a lot of good things. I think the security software – antivirus are a must have on any PC nowadays. You can get a trojan, virus or a key logger sooner than you can say 1, 2, 3!
Never, ever click any sort of attachments from unknown people.. even from the known ones can contain malware without the other person knowing.
Another good tip is to frequently change your passwords and do not use same ones for multiple websites.
These schemes that con artists use are getting harder and harder to catch so be very careful.
If I didn’t know better I would think this would never happen to me. I am an intelligent, highly educated individual who reads a lot. But, alas, it did. To my defense, it happened to me in the early days of the Internet before this kind thing was known. While I wasn’t ripped off while buying real estate, the terrible feeling that you’ve been taken and your money is long gone is the same. I got an offer to buy two Apple laptop computers for $650 each. It happened in 2003 so I don’t remember the particulars but I should have been smarter, especially when I had to send the money to SPAIN?!?! I don’t know what I was thinking but I sent it via Western Union and that was the end of that.
That is scary. You are going to buy, undergo finalizing the documents and transactions then suddenly the hacker tries to lure you out pretending he is your contact person. Be careful in transactions. Thank you for this information. Buyers can now avoid scammers and hackers.
I don’t really understand how could people take it in their conscience to rob other people of their hard earned money. I mean I know hat it is for profit, but why can’t they just use their computer skills somewhere they can earn millions, but not defrauding people? It’s really scary that this kind of thing is happening, and indeed many have been victims, and many are still being victimized by these kind of transactions. It’s really great that you presented these kind of tips for people to be more aware and protect themselves and their hard earned money from people like this. Before giving private information, especially regarding your finances, one must make sure that it is being handed to the intended person and not some scammer or hacker on the receiving end.