Relocation home buyers need to beware of wire fraud
Wire fraud is on the rise, and can result in the significant loss of money for home buyers who fall prey.
That is why the Houston real estate community is warning home buyers to be extremely vigilant about any wire transfer instructions they might receive by email from any party during the course of a real estate transaction. This, along with email hacking, has become one of the most common ways for wire fraud scams to be perpetrated on home buyers.
Known as Business Email Compromise (BEC) or Email Account Compromise (EAC), these scams target businesses and individuals, and are typically carried out by compromising legitimate business emails for the purpose of conducting unauthorized transfers of funds.
For example, that means that an email that looks like it was sent by the title company, providing a home buyer with wiring instructions in advance of closing, may in fact be part of an elicit scheme to steal those funds.
People who are relocating might be even more susceptible to such scams, because they are often inundated with emails and communication from multiple parties involved in their move. As such, they need to be very careful about who they are communicating with, to ensure that they don’t inadvertently put themselves at risk.
Ed Wolff, president of Beth Wolff Realtors Real Living, said that he tells his relocation clients that emails are not a secure source for sending and receiving financial information.
“I think in any scenario today, purchasers and sellers both need to know that there’s no substitute for personal face-to-face or verified communication when it comes to wiring instructions,” Wolff said. “Our recommendation for home buyers is to use a cashier’s check if at all possible.
“But, if somebody is going to send a wire, they need to have not only verbal verification, but written verification from more than one party stating that this is the authorized method to deliver that information.”
In the event that a home buyer suspects that they have been a victim of wire fraud and have sent a wire transfer to the wrong entity, Wolff said that they have a very short window of time in which to possibly recover those funds.
If that happens, the home buyer should immediately contact their financial institution and request a recall of the funds. Then, they should contact their local FBI office to report the fraudulent transfer, and also file a complaint with the FBI’s Crime Complaint Center at www.ic3.gov.
Wolff said that the issue with people who are relocating is that they often need to send money via wire transfer.
“A lot of times people who are relocating are not here on the day of closing or prior to closing. They are sending money back and forth from where they’re moving from, to where they are moving to through other title companies,” said Wolff.
So, he said it’s increasingly important to protect all of the data in regard to a real estate transaction as closely as possible.
The uptick in wire fraud is also of high concern for the Houston Association of Realtors.
Kenya Burrell-VanWormer, HAR’s 2018 chair, said the association is proactively making sure that Realtors and brokers are well-educated about what they can do to help safeguard their clients.
“As an association, we are committed to making sure that consumers in the Houston area can buy a home without the nightmare of losing funds during the transaction,” Burrell-VanWormer said.
She added that a recent precautionary measure that HAR put in place was the removal of title company information from the private agents remarks in the MLS system. And while this change won’t prevent wire fraud scams, she said that it does remove a layer of vulnerability.
Many members of the real estate community have also added a statement to their email signatures warning recipients that they should never trust wiring instructions that are sent via email, text messages or social media. Consumers should not trust electronic communication for providing wire fund transfer information.
During a real estate transaction, there are many moving parts and much communication sent between many various parties. So, it is critical for home buyers to carefully read every email and document that they receive, and to be skeptical of any email that asks them to provide financial information.
“When you are in the process of buying a home and have so much at stake, it’s important to take the time with every email, every document, and every phone call that you receive, and not be distracted, so that you can make sure that you are protecting your assets,” Burrell-VanWormer said.
Michelle Sandlin is an award-winning writer, journalist and global mobility industry expert. Follow her on Facebook: www.facebook.com/TheMichelleSandlin and on Twitter: @MichelleSandlin. Also visit “On the Move” at blog.chron.com/onthemove.