BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Wire Fraud Scam Alert
There is a growing scheme in which buyers have received e–mails allegedly from an escrow company providing wire information for use by the buyer to transmit earnest money or purchase money deposits for their purchase transaction. Unfortunately, hackers intercept these escrow company e-mails and then alter the account information in the e-mails to re-direct buyer’s funds to the hacker’s account. The altered e–mails from the hacker appear to be genuine containing the escrow company’s e–mail information and/or logos, etc. When the buyers wire their funds pursuant to the altered instructions, their money disappears, usually to an off-shore account, with little chance of recovery.
It appears that the hackers monitor the e–mail traffic of the escrow company or the buyer and thus are aware of the timing of pending transactions. In reported instances, it was a buyer who was induced to misdirect their own funds; however these hacked e–mails could conceivably be used to cause sellers who wire their sale proceeds to be victims as well.
PRACTICE TIPS
1. Provide the attached “Wire Fraud Scam Alert” to sellers and buyers in all transactions and obtain a signed copy for your files.
2. At the same time, remind your clients to read the Alert and take precautions when wiring any funds to or from escrow.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
(INSERT BROKER NAME)
WIRE FRAUD SCAM ALERT
Cyber-crime is an unfortunate reality for many large institutions and is also a potential threat in real estate transactions.
Wiring funds directly to escrow is still viewed by the real estate industry as a better practice than having real estate agents physically transporting buyers’ deposit checks. However, recently there is a small but growing scheme in which buyers have received e–mails allegedly from an escrow company providing wire information for use by the buyer to transmit earnest money or purchase money deposits for their purchase transaction. Unfortunately, hackers intercept these escrow company e-mails and then alter the account information in the e-mails to re-direct the buyer’s funds to the hacker’s account. The altered e–mails from the hacker appear to be genuine containing the escrow company’s e–mail information and/or logos, etc. When the buyers wire their funds pursuant to the altered instructions, their money disappears, often to an off-shore account, with little chance of recovery.
It appears that the hackers monitor the e–mail traffic of the escrow company or the buyer and thus are aware of the timing of pending transactions. In reported instances, it was a buyer who was induced to misdirect their own funds; however these hacked e–mails could conceivably be used to cause sellers to be victims as well.
To protect your funds and to avoid identity theft, you are encouraged to take appropriate, immediate steps to secure the computer systems that you use along with all e–mail accounts. Buyers and sellers should confirm all e–mail wiring instructions directly with the escrow officer by calling the escrow officer and in that conversation the correct account number information should be repeated verbally before taking any steps to have the funds transferred.
If there is any indication that you have received questionable wiring instructions, you should promptly notify your bank, your real estate agent and the escrowholder. There are many on-line sources that can provide useful information regarding this topic including, but not limited to, the following sites:
The Federal Bureau of Investigation @ www.fbi.gov
The Internet Crime Complaint Center @ www.ic3.gov
The National White Collar Crime Center @ www.nw3c.org
On Guard Online @ www.onguardonline.gov
The undersigned acknowledge receipt of this Advisory.
Seller: _________________________________ Date: __________________
Seller: _________________________________ Date: __________________
Buyer: ________________________________ Date: __________________
Buyer: ________________________________ Date: __________________