Scammers Targeting Real Estate Wire Transfers

By Harry J. Lew

Are you a real estate agent or broker who facilitates wire transfers as part of your sales transactions? If so, listen up! The FBI is warning of sophisticated scammers who attempt to re-direct wire transfers for their own financial benefit.

According to an FBI public service announcement, between December 2016 and May 2018, wire-transfer scams increased 136 percent in terms of “global exposed losses.” The FBI said total exposed losses, which include actual and attempted losses, reached $12.53 billion worldwide.

How does the scam work? The FBI says scammers initially send a spoofed e-mail to the purchaser in a transaction, often relating to a real estate sale. The e-mail directs the buyer to change the payment type and/or payment location to a fraudulent destination account. Once the money is sent to the fake account, the criminals quickly drain it and move on to their next victim.

The FBI says firms involved in the real estate industry are frequent targets of such scams. They include homebuyers and sellers, real estate agents, law firms, and title companies. Because the value of such transactions can be large, scammers have increasingly set their sights on the industry in recent years. For example, wire-transfer scams targeting the real estate sector increased 1100 percent in terms of numbers of victims from 2015 to 2017. Meanwhile, the reported monetary loss increased 2200 percent over the same period.

How to protect yourself against such scams? The FBI says the best defense is to carefully verify any requests for a change in payment type and/or location. For example, scammers frequently request that payments originally slated for check payments be handled via wire instead. Scammers also sometimes request changes to the original recipient’s financial information.

Since wire-transfer scammers often use public information on real estate listing sites to target victims, including homes that are “under contract,” be careful of any communications consisting solely of e-mails. But don’t assume that a phone call requesting a wire-transfer change is legitimate. Law enforcement has reported instances of scammers reaching out via phone. The only way to forestall such attempts is for the buyer and seller to arrange for a code word to use during their phone and e-mail exchanges.

If despite your best efforts you fall victim to a fraudulent wire transfer, respond swiftly. First, contact your financial institution immediately and request a recall of the funds. Second, report the crime to your nearest FBI office. Finally, file a complaint with the Internet Crime Complaint Center (IC3).