Picture this: After months of house hunting, you’ve found the one. Your offer has been accepted, the home has passed inspection and you’re in the home stretch. Then you get an urgent text saying you need to send money now or you’re going to lose your dream home. It’s a homebuyer’s nightmare — and probably a scam.
Across the board, money transfer scams (and wire fraud) like this are on the rise. Crafty criminals are leveraging this classic scam in new, but often common, ways — particularly in real estate dealings.
How wire fraud works
Fraudsters reproduce sites, profiles and listings to give the appearance of credibility and authenticity. Their fake postings (or websites), pictures, sad stories, get-rich-quick promises or other social engineering schemes get their targets to send cash (via money or wire transfer) in exchange for promised goods and/or services that don’t actually exist. Scammers have even taken their schemes to dating apps and social media websites with fake profiles.
Unfortunately, no one is immune. Cybercriminals are utilizing timely and opportune scams to defraud unknowing targets more than ever. But knowing what to look for — and when — can help keep you protected.
Wire fraud in real estate
Fake ads or real estate listings
Scammers often replicate legitimate real estate listings with slightly modified ads (like changing the email, phone and contact information) on authentic sites. Others fabricate advertisements for places and things that aren’t for rent or sale. And in some of the most extreme situations, criminals lure victims with listings of residences that don’t actually exist and attract attention by offering below-market value for them.
Lender or homeowner impersonation
The fraudsters impersonate mortgage lenders, or even the homeowner or property owner if you respond to these ads. They ask you to wire an application fee or brokerage fees. An unaware buyer may begin the entire process with a person who’s not the seller or lender and, throughout the process, continue to be scammed out of more and more money.
Email fraud
In some cases, fraudsters may go as far as hacking into a victim’s email account and searching for keywords like bank, mortgage, real estate or loan to get a list of all parties involved. The fraudster creates a new email address very similar to one of the third parties, like the title company, and sends an email posing as that person — they might ask for personal information, send wire transfer instructions or even divert the real payment when you’re close to closing the transaction.
It’s very difficult to catch or track the criminal, and, once money is wired, it’s even more challenging, if not impossible, to get it back. That’s why it’s especially important to independently confirm wiring instructions in-person or using a known, trusted phone number.
How to spot wire fraud
When it comes to wire fraud, whether in real estate or other industries, there are typically some early warning signs:
1. An evident lack of organization
When selling a home (or another expensive item), most folks are motivated to sell. If it seems like things are taking longer than they should, or the seller is disorganized, it can hint at a larger problem. Often, the fraudsters have limited access to much-needed transactional info and can only provide excuses.
2. Everything needs to be done now
This one works in lockstep with being unprepared. Fraudsters push a deadline or sense of urgency so that you’re less likely to take a critical eye to the missing pieces or are more likely to make a mistake. You may even wire money without verifying fees, identities, addresses and the property (or good or service) for sale.
3. No identity verification
Validating someone’s identity is important when making any transaction, especially large ones in real estate. Fraudsters often blame lack of proximity and availability on why they can’t verify their identity. They may even pitch working with their own representatives instead of going through official channels. Insist on following the formal methods, such as working through a known and trusted attorney’s office for a housing transaction.
If you are going to wire money, confirm the identity of the recipient and the bank information where the funds are to be sent. This ensures that both the identity of the recipient and bank information is accurate.
If you are going to wire money, confirm the identity of the recipient and the bank information where the funds are to be sent.
What should you do if you’ve been targeted by wire fraud?
If you believe you’ve been a victim of wire fraud or any cybercrime, immediately report the incident to your financial institution and your local FBI office, as they may be able to recover your stolen money. You should also file a complaint with the FBI’s Internet Crime Complaint Center (IC3). They may be able to assist in further recovery efforts.
Always be vigilant
Remember: The best defense is a good offense. Always verify the information of any person or institution you’re working with during a wire transfer to help remain proactive with your financial and cyber security.
