HOW TO PROTECT YOURSELF FROM WIRE FRAUD
Uni First Investment Inc
Uni First Investment Inc Alhambra, CA
Published on June 3, 2021

HOW TO PROTECT YOURSELF FROM WIRE FRAUD

From security breaches to identity theft, today’s consumers have many obstacles to avoid in the quest to protect what’s theirs. In recent years, the growing threat impacting those who are buying a house. Wire fraud is a growing problem; one that is costing Americans more every year. Here’s how wire fraud works, and what you can do to prevent it.

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What is Wire Fraud?

Wire fraud is anything that interrupts the transferring of money between two legitimate entities. With real estate, buyers often wire money to the seller via the closing process. Title company representatives and Realtors are instrumental in providing instructions on when and how to do this. Unfortunately, this makes them unknowing pawns in wire fraud attempts. The criminal element engaging in wire fraud is intelligent. Careful planning, patience, and high-tech tactics are paying off for them, leaving homeowners without their hard-earned money.

How Criminals Engage in Wire Fraud

With better technology comes more opportunity for criminals. The fraud often involves fake email accounts that clone your actual title company contact’s email address, formatting, and signature. Criminals engaged in wire fraud often watch the actual email communications for weeks before intervening. When you are ready to transfer the money, the criminal sends you an email that looks like it came from your point of contact at the title company. The instructions and links contained in that email look legitimate, but they provide an alternate pathway for your money. When the criminal takes action, your money is long gone before you realize it didn’t go where it was supposed to. Recovering the stolen money is proving to be nearly impossible.

How to Prevent Wire Fraud

The first step to protect yourself is to understand that risks that come with transferring money. Given how expensive real estate is, it’s no surprise that it’s a big target. Once you understand the risks, you can protect yourself with a few simple steps.

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  1. Create very secure passwords on any accounts associated with your real estate dealings. This includes email accounts as well as bank accounts.
  2. Get verbal confirmation from your points of contact that they did, in fact, send the email with wiring instructions that you received.
  3. Do not share personal information over email. This means no birth dates and no financial information

What Wire Fraud Looks Like

Cybercrime is always evolving. It can be very difficult to detect; often, by the time a victim suspects fraud, the money is long gone. However, there are a few signs to look for if you suspect not everything is above board. This article from HousingWire gives a firsthand account of one victim who was able to intervene in time to recoup most of his lost money. The author mentions several key points that should have raised a warning flag sooner, including:

  1. Email addresses that are slightly different from what you received prior
  2. Requests for information you have already provided to your contacts
  3. Conflicting instructions from the same person
  4. Email wording that suddenly seems “off” or unlike the phrasing used by that person before

Do not assume the emails are safe because they are encrypted. In the HousingWire case study, the victim received multiple encrypted emails. Some were from his title company or Realtor, and some were just made to look like they were legitimate.

What to Do if you Suspect Fraud

Minutes count if you suspect someone is trying to steal your money. Law enforcement has a very difficult time handling these cases because of how quickly money changes hands and crosses state and international boundaries. The faster you can reach your bank, the better. Have your accounts frozen immediately, and then seek professional assistance. The FBI has a cybercrime division that focuses on better, faster ways to track the people who are responsible for cyber crimes, including fraud. Industry analysts estimate that for the fiscal year 2017, Americans were defrauded out of nearly $1 billion. What’s more staggering is that just one year prior, in fiscal year 2016, that number was $19 million. California ranks #3 in wire fraud, behind Florida and New York. Clearly this is a growing problem–one without easy solutions. Many first-time home buyers are expected to enter the market in 2019. Education is critical to stopping criminals before they have a chance to act.

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