Every time you build a better mousetrap, someone goes and builds a better mouse. The history of closings scams is long and illustrious. Back in the last recession, scammers would bring counterfeited cashier’s checks to a closing and stiff title companies and sellers for the fees. Title companies then began requiring that the money be wired or transferred in advance to the title company’s bank account. Now the scammers have evolved enough patience and expertise to execute another type of fraud. In the blink of an eye, your earnest money and the funds that you have set aside for closing costs can disappear overseas, never to be seen again. In multiple cases buyers and sellers, real estate agents and title companies have lost tens of thousands and even hundreds of thousands of dollars.
Remember, scammers are smart, and the emails can be extremely plausible in both appearance and tone, but the only way that they can find out this information is if your email is compromised. Attorneys, title company employees, buyers, sellers, realtors, and even lenders can be targeted by a phishing email that puts passwords in the hands of these scammers. Everyone should follow email security best practices.
- Don’t open attachments even from familiar sources without verifying that they were intentionally sent.
- Don’t click on any links in a suspect email.
- Do not conduct business over an unsecured Wi-Fi connection.
- Do not supply any personal information or login information to any source via email.
- Clean out and or archive your emails on a regular basis.
- Create strong passwords and change them frequently.
- Use and regularly update firewall, antivirus, and security software.
- Encrypt your emails.
It is very important that all parties be informed of the possibility of fraud. Detail steps to take before wiring money for earnest money or closing costs. Do not trust any contact information in an email that is telling you to wire money or transfer funds to any account other than that of the title company. The party transferring the funds should call a verified telephone number, and speak only to the intended recipient before completing the transaction. Finally, if for some reason a party does transfer funds to a fraudster, immediately get a hold of the financial institutions and try to put a stop to the transfer. Contact your local police department, and the FBI’s Internet Crime Complaint Center. All parties in the transaction should immediately be contacted and instructed to change usernames and passwords to the accounts that may have been compromised.
However, the best defense is a good offense – real estate agents and title companies should work closely with information technology and data security specialists to make sure that there information systems and networks are tough for scammers to crack. Train personnel in best security practices, and update clients and associates regularly on security procedures. Most of all, tell your clients that you will never ask for or convey sensitive information via email and that should they receive an email appearing to do so they should call you first.