This Cybersecurity Awareness Month, let’s spread awareness about home wire fraud

Over the past decade, real estate transactions have increasingly become a prime target for cybercrime. Rather than slowing down, scams are getting faster, more sophisticated, and harder to spot. Since October is Cybersecurity Awareness Month, it is important for the real estate industry and consumers to speak up and spread the word about how to prevent these cybercrimes.

Real estate fraud—a scam in which a buyer is tricked into making a deposit with a fraudulent person—has become more common as housing prices have risen. In a technique called phishing, the scammer will collect confidential information through a website form, email, or phone call. They will then use that information to monitor the buyer’s email account and identify if they are buying a home. If a buyer is in the process of buying a home, the scammer will send false wire instructions to the buyer before closing—often appearing to come from a trusted representative at work.

FBI data shows that fraud in real estate transactions has increased over the past 10 years from less than $9 million in losses in 2015 to $446 million in 2022. Although consumer education has increased significantly in recent years, CertifID’s 2024 State of Wire Fraud Report found that nearly half of consumers do not report being sufficiently aware of the risk of real estate wire fraud.

How consumers can protect themselves

Buyers can take steps to protect themselves from mortgage fraud. First, wire instructions must always be verified in person or by phone with a known number before money is transferred.

If wiring instructions are sent by email, note changes to the expected email address, such as the addition or deletion of one or more letters. Any orders labeled “urgent,” “confidential,” or “confidential” should also be scrutinized.

Consumers should also avoid emailing financial information, such as bank account numbers. If financial information is requested on a website, make sure the site is a trusted URL that begins with “https.”

To prevent fraudsters from accessing your email account, consumers should be careful about opening email attachments or downloading links from suspicious emails. Keeping your operating system browser and security software up to date can help ensure that suspicious emails are flagged.

What to do if you or someone else becomes a victim

If you suspect you are a victim of real estate wire fraud, taking immediate action is critical. Immediately contact your financial institution and ask them to contact the financial institution where the transfer is directed.

Next, contact your local FBI office, which will help you access or stop the fraudulently transferred funds. Finally, you should file a complaint with the FBI’s Internet Crime Complaint Center at www.IC3.gov.

What the title industry does

It has long been a priority in the title industry to increase awareness and identify mortgage fraud. Through consumer alerts on websites and email communications, preparedness tools, and other educational resources, the title industry is committed to preventing these scams.

In addition to education, efforts to reduce the industry are active. According to ALTA’s research, in 2022, 26% of title companies reported that they were able to recover the amount of money incorrectly transferred due to fraud compared to only 17% in 2021. of stolen funds.

Collaboration between the housing industry and government agencies is also key to solving this problem. The title industry is working closely with financial institutions and the FBI to help recover wrongly transferred funds. Additionally, by working with industry and government partners, it is easier to identify perpetrators and dismantle their organizations.

From putting a warning in an email signature to working with government agencies to identify fraudsters, real estate professionals can protect consumers, and their hard-earned savings, from bad actors.

Diane Tomb is the CEO of the American Land Title Association.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: [email protected]

Related