Closing on a new home is an exciting moment for anyone – but that moment could quickly turn to one of unparalleled disappointment, thanks to wire transfer scams. These scams have only risen in popularity since their inception, including an over 480 percent increase in 2016, leading to multiple billions of dollars stolen from potential homeowners. The next time you purchase a home, keep these tips in mind to avoid this extremely dangerous form of fraud.
How does a wire transfer scam work?
Starting the scam consists of getting access to the email of a realtor, title company, closing attorney, or anyone involved in the closing process, where communication for real estate sales is normally conducted. Fraudsters will search those emails for any sales that are about to close, and then use the compromised email to contact the buyer or their bank with similar instructions for payment as the title company would use. Instead of using the account of the closing agent to receive the money, the scammers will use their own banks, often located outside of the United States. Once the money is gone, it can be exceedingly difficult to get back.
What can I do to protect myself from wire transfer scams?
Thankfully, businesses have started to take precautions against the threat posed by these scams. You’ve probably used 2-step authentication to log into the likes of Facebook or other social media platforms. The process is simple on your end, and it provides one of the most secure ways to authenticate that you’re dealing with the right people. When you receive the wire transfer instructions or send the payment, you’ll be prompted for a code which will be sent to you via text. Once you enter that code, the title company or attorney knows it’s you because you have your phone; likewise, they know it’s you because you previously had to give them your phone number, and only they can send and then verify your code.
This method isn’t perfect, as an experienced hacker may be able to gain access to the verification servers, at which point the 2-step authentication process is pointless. Most of the wire transfer scams we’ve seen, however, are conducted on less secure email servers at title companies, because they lack the security requirements of a bank and these scammers generally do not possess the ability to gain access to more secure systems. Not every closing agent will offer 2-step authentication. As a better alternative, calling to confirm the instructions you received and the account number listed is a simple way to ensure you’re sending the money to the right place.
At Salas Law Firm, we take wire transfer scams very seriously. We have put precautions in place to ensure that our clients are safe, and have high standards for security. We will never email or text you full wiring instructions so as to avoid any possibility of hackers gaining that information. If you’re in search of a closing attorney that can keep your money safe, contact us today at (954) 315-1155. If you’re a nurse, veteran, or first responder, we’re offering discounts on our closing services until the end of the year.
John Salas
