Home Buyers and Sellers Need to Protect Themselves from Wire Fraud in real estate transactions.
The legal staff at the California Association of REALTORS® (CAR) has provided a clear advisory (Wire Fraud Advisory, WFA form), which deals with the challenge presented by fraudulent hackers who like to get involved in real estate transactions.
The challenge: Fraudulent hackers like to get involved it legitimate real estate transactions. They can sometimes gain access to the network of participants in a real estate transaction, which might be through an email account of the parties, escrow, other affiliated services such as title or home warranty.
Example: Hackers send a fraudulent email and pose as one of the relevant parties (agent, escrow, title, etc) and issue false instructions as to where money is to be wired.
The new CAR Wire Fraud advisory (WFA form) is one page and should make it easier to bring attention for the parties. Here are the 5 specific recommendations of CAR form:
- Obtain the phone number of the Escrow Officer at the beginning of the transaction.
- DO NOT EVER WIRE FUNDS PRIOR TO CALLING YOUR ESCROW OFFICER TO CONFIRM WIRE INSTRUCTIONS. ONLY USE A PHONE NUMBER YOU WERE PROVIDED PREVIOUSLY. Do not use any different phone number included in the emailed wire transfer instructions.
- Orally confirm the wire transfer instruction is legitimate and confirm the bank routing number, account numbers and other codes before taking steps to transfer funds.
- Avoid sending personal information in emails or texts. Provide such information in person or over the telephone directly to the Escrow Officer.
- Take steps to secure the system you are using with your email account. These steps include creating strong passwords, using secure WiFi, and not using free services.
First advice is the best: Obtain the phone number of the escrow officer at the beginning of the transaction – and then not to switch to another after possible fraudulent hacker persuasion.
Real estate agents should use the Wire Fraud Advisory (WFA form) early in their transactions, which should provide best information and make it clear for buyers and sellers.
It’s also important that California that real estate brokers make sure that the escrow providers they recommend for their clients have a private and secure system (such as platform for encrypting of messages and data) for communicating about procedure for wiring of funds.
By Harrison K. Long, real estate attorney at Orange County CA – Member of CA State Bar Association #69137. Real estate broker – CALBRE #01410855. Source of information is the California Association of Realtors and CA legislative and laws information. This is for information only and is not the providing of legal services.
“Home Buyers and Sellers Need to Protect Themselves from Wire Fraud”