By now we should have all been told about the necessity of protecting ourselves from cybercrime in our personal and work lives. What we may not think about as often is protecting ourselves from cybercrime during a real estate transaction. It’s easy to assume that you’re safe because of the safety and security measures of the banking industry and title insurance companies but even with the most cautious, the unthinkable can happen.
Note, when in a contract to purchase a property, a buyer will still be expected to provide the funds they’re contracted to pay, even if the funds are stolen from the buyer in the process of delivering to the title company. Therefore, the loss of those funds can be devastating to a transaction. In a real estate transaction, different types of cybercrime can occur. Your local REALTOR®, your title company, and your lender will all work together with you to keep your transaction running smoothly as safely as possible. In the process, communication and a strong dose of caution are keys to success. According to the FBI Internet Crime Complaint Center, internet crimes accounted for $2.76 billion in 2022 with $31,080,667 of that being directly related to real estate.
The National Association of REALTORS® urges consumers to be always aware and particularly vigilant when participating in real estate transactions and moving large sums of money electronically. Below are some key points to remember about wire fraud and real estate transactions.
Discuss wire fraud with your REALTOR® - Your local REALTOR® is often your first source of information and warning about wire fraud and cybercrimes affecting the real estate industry. Your agent may ask you to review and sign a Wire Fraud Warning (TXR 2517) form to acknowledge that you have discussed the realities of wire fraud and how to protect yourself against becoming a victim.
Confirm. Confirm. Confirm. – The title company will send wiring instructions to you directly and sometimes they will arrive in a secure email portal. Even if your instructions arrive via secure email, always call the title company escrow officer you are working with and confirm. Call and speak on the phone with the same escrow personnel handling your transaction to ensure the instructions you received were from them and are correct. Your escrow officer and their team at the title company will be glad to help you confirm and glad you did call. Wire fraud is an expensive and invasive crime affecting all areas of a transaction.
It's okay to ask questions – No amount of caution is too much in a transaction. When in doubt, ask. Cybercrime is often disguised as an email from the title company or your REALTOR®. Hackers will copy and use the same email signature, headshot, logo, and contact information. The very small, detailed differences in these emails can be very difficult for the untrained eye to recognize. Sometimes it’s one digit in the telephone number or an added tiny character in an email address or website. The individuals hacking into an email account to dupe buyers out of their money are very sophisticated and it’s easy to be fooled. Question everything.
Move fast! – If you suspect you’ve accidentally wired funds to a fraudulent account, call your bank immediately and ask to stop the transaction. Then call the title company and alert them of the possible fraud. Finally, call the FBI Internet Crime Complaint Center and report the crime. On occasion, if the fraud is caught fast enough, the bank may be able to stop the funds from going out. Note, in our fast-moving society and with the speed of the banking process in today’s world, this could mean within the same hour of the wire transfer order. Speed is key and this is the first and best line of defense.
For more information about wire fraud safety visit www.texasrealestate.com or www.ic3.gov
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