The warnings of real estate closing scams were rapidly broadcasted in 2015 . And by 2016, there was awareness that criminals were wholeheartedly targeting all parties involved in real estate transactions through phishing emails. The phishing emails that were sent seemed legit, and in many cases appeared to have come from your agent or title company, but were actually sent by criminals intent on having you wire money to them. No one was immune from receiving these emails. Real estate scammers targeted home buyers and sellers, real estate agents, title companies and attorneys.
The FBI (fbi.gov) categorizes this type of crime as Business E-mail Compromise (BEC)/E-mail Account Compromise (EAC). The scam didn’t begin in 2015, but the FBI began tracking this type of crime in 2013. But it wasn’t until 2015 that it seemed as if the real estate scammers used BEC/EAC to target the real estate industry, and it spread ike a plague. And despite efforts by the real estate industry to prevent such crime, BEC/EAC is on the rise. Real estate scammers have adapted and have become increasingly sophisticated. Many of the phishing emails (calls) are not distinguishable from the real thing.
Statistics compiled by the FBI Internet Crime Complaint Center (ic3.gov) indicate that there were 78,617 incidents of BEC/EAC worldwide between October 2013 and May 2018. Over half of these victims (41,058) were in the U.S. Total global losses during this time period is calculated to be $12,536,948,299 (U.S. losses were $2,935,161,457).
Unfortunately, the real estate industry has been a target of interest since 2015. According to FBI statistics, the number of BEC/EAC real estate related victims increased 1100% between 2015 and 2017. So far, the highest number of BEC/EAC real estate victims were reported in May 2018, while the highest dollar loss from real estate victims was reported in September 2017. The number of complaints and losses is likely correlated to real estate market activity (notwithstanding efforts to thwart such crimes).
How do criminals know about your real estate transaction? The internet. Real estate scammers use information available on real estate portals to identify homes that are pending (under contract) along with agent contact information. The information is used to infiltrate agents’ emails to compile client names and closing information to target everyone involved in the real estate transaction with phishing emails. The emails typically request changes in settlement funding. The changes can request wire in lieu of check, and/or changes in the wire instructions (which would send funds directly to the criminals).
The FBI has also described BEC/EAC spilling over into phone calls! In addition to sending spoofed emails, the criminals are also calling you asking for personal information for “verification purposes.” Experts suggest you be cautious about calls asking for changes in payment types and/or wire instructions. The fake calls are so real such that victims have reported not being able to tell the difference. Security experts recommended that you create code phrases to verify phone calls with your agent and title company.
Experts also warn of any communication that is exclusively email and/or asks you to call for verification purposes. It is likely that any contact information listed in the phishing email is fake. If the email sender claims to be from the title company or your agent, call them directly to verify the authenticity of the email. If you receive any email requesting personal information and/or changes in payment/wire instructions, verify the email is legitimate by calling the sender directly (and use your code phrase).
Original article is published at https://dankrell.com/blog/2019/11/19/real-estate-scammers-emailing-you/
By Dan Krell
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.