Wire Transfer Scams Involving Real Estate Transactions: How to Prevent Fraud with Effective Email Security
- by Brittany Day
Wire transfer scams in the real estate industry are on the rise. Buying a home should be a joyful, celebratory affair; however, in reality, wire transfer fraud victims around the world are losing their life savings in the closing process every day.
Criminals are taking advantage of the complex and hurried nature of the real estate, which makes these scams relatively easy to carry out and often effective. The number of vulnerable parties involved in the real estate closing process - attorneys, lenders, agents, title companies, sellers and buyers - also works to attackers’ advantage.
Many wire transfer scams happen via a highly targeted phishing attack. A mortgage phishing scam is initiated with the compromise of either a realtor or a title company's email account by malware sent via email. In these phishing scams, criminals attempt to divert closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to wiring instructions. The real estate sector is ill-prepared to deal with this serious and ever-evolving email threat, and in general, companies in the real estate industry underestimate the importance of investing in a comprehensive and highly effective cloud email security solution.
Just a few days ago, the Better Business Bureau warned of the dramatic increase in real estate fraud in a new report highlighting real estate email scams. In a recent interview about this report, Better Business Bureau investigations specialist Steve Baker states, “We found that 80% of businesses have gotten one of these emails in the last year.” The FBI has also spoken out on the issue, reporting that between 2017 and 2018 there were a 166% increase in US real estate wire fraud losses (experts believe that as little as 15% of this fraud is reported). With an average loss of $179,000, real estate fraud often derails transactions, leaving victims homeless.
Earlier this year, a Foxconn executive and his wife lost $260,000 in a fraudulent wire transfer involved in the process of closing on a home. It wasn’t until after the transaction was complete that the victims learned that the emails were not actually coming from the title company, but instead someone who was impersonating their identity using a similar looking email address. In August, a woman lost $45,000 in a wire transfer scam while closing on a house in Forest Hill, Texas. Gracie Veronica (the victim) explains her devastation: “It was an enormous amount of money and I worked so hard for it. For someone to just come in a matter of seconds and take away something I’ve been saving up for years is truly devastating.” Unfortunately, the list of successful wire transfer scams and their heartbreaking consequences goes on.
Because email is a popular method for providing instructions for sending funds at closing, it often takes the blame when a wire transfer scam occurs, and it is inaccurately labeled as an inherently “insecure” or “risky” method of sharing sensitive information. However, by implementing basic email security best practices and investing in an effective cloud email security solution, real estate companies and agents can mitigate their risk of falling for a dangerous and costly wire transfer scam.
Leaders in Real Estate Industry are Taking Notice of Wire Transfer Fraud and Responding
Wire transfer scams & estate frauds have become so prominent and problematic that in July 2019, American Land Title Association (ALTA), Community Mortgage Lenders of America, American Escrow Association, Real Estate Services Providers Counsel, among others, announced the creation of a Coalition to Stop Real Estate Wire Fraud, which aims to educate both real estate professionals and consumers about the dangers of wire fraud.
How Do Wire Transfer Scams Involving Real Estate Transactions Work?
Wire transfer scams that impact the real estate industry are usually fairly simple and straightforward, but a disheartening number of companies and agents fall for them nonetheless. Multiple Listing Service and syndication sites like Zillow and Trulia enable threat actors to identify pending homes sales and profile all parties involved in the transaction. Then, a criminal hacks into a title company or lender’s email server or computer system, where he or she quietly sits and waits, reading emails and studying language use and communication patterns. Once the moment is right, he or she emails the buyer or financial institution from a spoofed email account with fake wire transfer instructions pertaining to a particular real estate loan closing. Threat actors frequently go as far as to call victims to reinforce that their fake wire transfer is legitimate. In a successful scam, the buyer or financial institution follows the bogus instructions to generate the wire transfer request. Once the funds are sent, the criminal moves on to his or her next victim.
Scams are usually not discovered until the title company or closing agent informs the buyer or financial institution that they did not receive the anticipated funds.
These criminals rely on trust. They know you trust your real estate agent, your lawyer or the bank, and they exploit that trust to steal from you.
- Coalition to Stop Real Estate Wire Fraud
What to Do if You Think You’ve Been Robbed:
If you suspect that you’ve been robbed in a wire transfer scam, it is critical that you act fast! Detecting that you sent money to the wrong account and contacting your bank within 24 hours provides the best chance of recovering your money. If you’ve been targeted in a scam:
- Call your bank immediately and ask them to issue a recall notice from your wire.
- Report the crime to IC3.gov. The FBI monitors these complaints regularly.
- Contact both your regional FBI office and your local police department. They may be able to help.
Best Practices for Recognizing and Preventing Wire Transfer Scams
Best practices for recognizing and preventing wire transfer fraud and stopping these scams before they result in losses include:
- Be on the lookout for common red flags that are associated with any compromised email. These include a sense of urgency, misspellings, poor grammar and emails sent outside of normal business hours.
- Be wary of emails that contain changes in payment type, such as changing from a certified check to a wire transfer, or changing account numbers at the last minute.
- Credit unions should require title companies to send wire transfer instructions using encrypted email.
- Credit unions should establish procedures to verify the legitimacy of wire transfer instructions received by email. They should also establish a passcode in advance, which can be used for verification purposes with a closing agent or title company.
- Credit unions should always confirm that members received wire transfer instructions via email and, if they did, credit unions should verify information and instructions with the closing agent or title company individually before sending funds on a member’s behalf.
- If you are unable to verify wire instructions, send a check instead of wiring funds.
- If you are in a business that regularly wires funds, check with your insurance company to see if you can obtain insurance to cover losses from wire fraud.
- Companies and credit unions should educate agents, members and employees about wire transfer scams, warning them about what to look for and how to best protect themselves from this threat.
- Both title companies and credit unions should ensure that they have implemented an effective business cloud email security that provides complete, end-to-end control of their email and prevents fraudulent mail from reaching the inbox and perpetuating wire transfer fraud.
How Guardian Digital Can Help
Guardian Digital EnGarde Cloud Email Security can drastically reduce your risk of falling for a wire transfer scam and having to deal with the financial heartbreak that often results. EnGarde provides comprehensive, fully-managed business email protection. This complete, end-to-end email vigilance prevents fraudulent emails from reaching the inbox. Some key benefits associated with implementing EnGarde Cloud Email Security include:
- A multi-layered, open-source approach to email security, where individual layers work harmoniously to provide comprehensive, resilient protection
- Automatically adjusting detection algorithms that anticipate attacks
- End-to-end email encryption and secure delivery
- Authentication of every email delivered using DMARC, DKIM and SPF
- Centrally managed cloud-based administration
- Seamless implementation and unrivaled 24x7x365 customer support
The Bottom Line
Wire transfer scams pose more of a threat to the real estate sector than ever before. While companies, agents and buyers should be wary of fraud, these scams are largely preventable by implementing general email security best practices and, most importantly, ensuring that you have reliable, comprehensive email security in place.
Have Additional Questions about Wire Transfer Scams Involving Real Estate Transactions?
Do you have any additional questions about wire transfer scams involving real estate transactions that have not been answered in this article? If so, please contact us and we would be happy to answer them!
- Thinking Strategically about Email Security in 2021 and Beyond
- There’s a Lot to be Gained with Effective Email Security
- Behind the Shield: EnGarde Cloud Email Security Explained
- Open Source: A Powerful, Yet Underutilized Weapon against Phishing & Zero-Day Attacks
- Buyer's Guide: What to Prioritize in an Email Security Solution
- Buyer's Guide to Office 365 & Workspace Email Security
- EnGarde Cloud Email Security: The Logical Solution to Cyber Risk in Office 365
- Exchange Servers Are Vulnerable - Learn How To Secure Your Email Server Now
- Top Email Security Risks in 2021 - How To Set Your Business Up for Safety & Success
- Ransomware By The Numbers: How Big Is My Risk?
- SMB Ransomware Warnings & How To Prevent an Attack
- Apache SpamAssassin 3.4.6 Release Fixes Two Potentially Aggravating Bugs
- Top Tips and Advice for Staying Safe Online in a Work-from-Home World
- Demystifying Phishing Attacks: How to Protect Yourself Now
- Why Your Business Needs Better Email Security
- Why Ransomware is a Threat to Business
- How to Protect Sensitive Data & Maintain Client Trust in Financial Services Industry
- Why Office 365 Users Are Moving Away from Relying on Default Email Protection Alone
- What You Need to Know to Shield Your Business from Ransomware
- Why You Need DMARC to Secure Email against Spoofing Attacks & Sender Fraud
- Biden's Cybersecurity Efforts Highlight the Power of this Key Technology
- Shortcomings of Endpoint Security in Securing Business Email
- Open Source Utilization in Email Security Demystified
- Limitations of Microsoft 365 Email Security & How To Close These Dangerous Gaps
- DMARC Quarantine vs. Reject: Which Should You Implement to Secure Business Email against Sender Fraud?
- Think Like A Criminal: What You Need to Know About Social Engineering Attacks in 2021
- TLS Email Encryption Explained - How To Encrypt Email with TLS
- Effectively Securing Business Email Accounts: Are Employees the Weakest Link?
- Encryption: An Essential Yet Highly Controversial Component of Digital Security
- Business Email Security Redefined: Key Benefits of Securing Your Business Email with Guardian Digital
- 8 Business Email Security Best Practices
- Demystifying Email Encryption: Stop Sender Fraud
- Demystifying Tax Fraud: How to Avoid Falling Victim to Deceptive, Costly Scams This Tax Season
- Coronavirus Phishing Scams are On the Rise - Is Your Business Email at Risk of Infection?
- Dave Wreski: A Passionate Engineer Brings the Power of Open Source to Business Email Security
- FBI: Existing Cloud Email Protection Inadequate Against Phishing, Ransomware
- Email Risk is Universal: Securing Business Email in Every Industry Sector
- The Remote Worker's Guide to Safely Navigating Office 365
- Why Your Business Needs Superior Email Protection
- Defending Against COVID Email Spoofing Attacks with DMARC
- You’ve Got Mail: How To Tell If It’s Fraud
- Open-Source Security Is Opening Eyes
- Think Like A Criminal: How To Write A Phishing Email
- The Four Biggest Email Threats Your Business Faces Today
- Everything On DocuSign Phishing Attacks in 3 Minutes
- Understanding Payload-Less Email Attacks in Under 3 Minutes
- Demystifying Fileless Malware in Less than 3 Minutes
- Apache SpamAssassin Leads A Growing List of Open-Source Projects Taking Steps to Correct Instances of Racism and White Privilege
- Cyber Risk Is Greater than Ever in the Legal Industry
- Understanding Malicious URL Protection - And Why You Need It to Secure Your Email
- Email Security for SMBs Beyond COVID-19
- Email Risk Is BIG for SMBs - How To Protect Your Business Now
- Why Email Security Is More Important Than Ever in This 'New Reality'
- The Threat of CEO Fraud Extends Beyond the C-Suite
- Top Email Security Trends Putting Your Business at Risk of Attack
- Managed Services: A Key Element of Effective Email Security that Even Modern Solutions Lack
- How to maintain security when employees work remotely: Advice from Leading Security Experts
- FBI: The 2020 Presidential Election Is Under Attack by Email Scammers
- AT&T Security Researchers Identify a Correlation between Strong Cybersecurity and Business Success
- The Aftermath of a Cyberattack Pt. 1: Phishing Recovery Basics
- It Pays to be Prepared! Ransomware Preparedness & Recovery Basics
- Breaking Down Fileless Malware: Anatomy of an Attack
- Keep the Holidays Merry & Bright - Beware of These Sneaky Seasonal Phishing Scams
- Migrating Business Email: The Hidden Complexities You Need To Know
- SPF, DKIM & DMARC: Definition & How They Secure Email Against Sender Fraud?
- Your Current Approach to Email Security May Not Be Enough
- Ways to Prevent Email Account being compromised in a Breach
- Celebrating 20 Years of Revolutionizing Digital Security
- IBM Closes its $34 Billion Acquisition of Red Hat
- Interview with Security Expert and Author Ira Winkler
- What is Phishing Email? How to prevent Phishing email scams?
- Ways Our Business Email Exceed Your Expectations
- Spear Phishing Protection - Definition & How To Recognize Spear Phishing Email
- What is Whaling (Whaling Phishing)? & How to Prevent Whaling attacks?
- Business Email Compromise (BEC) - Definition & Prevention From BEC Attacks
- Wire Transfer Scams Involving Real Estate Transactions: How to Prevent Fraud with Effective Email Security
- Guardian Digital and Mautic: A Dynamic Open-Source Duo
- Email Malware - How to Recognize & Prevent Malware Email Attack
- An Open-Source Success Story: Apache SpamAssassin Celebrates 18 Years of Effectively Combating Spam Email
- What is Spam Email - Types & How to Prevent Spam Emails?
- 2020: A New Decade of Digital Threats - Is Your Business Email Secure?
- Linux: An OS Capable of Effectively Meeting the US Government’s Security Needs Heading into 2020
- Complete Guide on Email Security & Threats Faced by Organizations
- Email Virus - Complete Guide to Email Viruses Plus Best Practices
- What Are Zero-Day Attacks & How Can I Prevent Them?
- Guardian Digital Keeps its Customers Protected from Intel Design Flaw
- Security Spotlight: Open Source Email Security Solutions
- Top Six Advantages of Open Source Development/Products
- Python and Bash - Contenders for the most used scripting language
- Guardian Digital Outlines Top 4 Benefits of Choosing Cloud
- Unrivaled Protection Against Today’s Most Dangerous Threats
- Guard Your Email Accounts Against Today’s Most Dangerous Threats
- Security Highlights from Defcon 26
- Linux / Open Source FAQs: Common Myths / Misconceptions
- Email Security FAQs Answered by Guardian Digital
- Guardian Digital Mail Systems: Designed to be Secure Without Fail