Experts caution buyers not to wire money based on info in an email
By Marilyn Kennedy Melia
CTW Features
Marie Campbell, and her fellow agents at Berkshire Hathaway Home Services in Chicago, now attach a rider to their contracts:
“It says that buyers should not accept any email instructions about wiring money to a closing,” Campbell said. “They must only follow oral instructions.”
Buyers should pick up the phone, calling a number they know is their agent’s and confirm wiring instructions, according to Jessica Edgerton, associate counsel, National Association of Realtors. Never rely on a number you find in an email, she warns.
Even better, receive wire transfer instructions in-person, according to Campbell.
Campbell’s adamant warning comes after a buyer served by her office last year was one of some 500 victims nationwide, according to FBI stats, fleeced out of a down payment and/or closing funds.
Basically, criminals hack into a real estate firm’s email, or an electronic transaction platform that all parties in a home purchase transaction use to track documents.
The criminals send an email to the buyer to wire the funds for closing to a false bank account. The thieves then empty that account.
“The criminals make these emails seem so real,” Campbell said. “Right after an agent sends an email to a client, they will send another one saying, ‘Oh, I gave you the wrong number a minute ago, here is the right one.’”
In some cases, buyers can’t recover the funds.
“But if a buyer calls the FBI within 72 hours, they might be able to get it back,” Edgerton said.
While real estate agents may have insurance covering some cyber-crime, Edgerton advises them to still follow the oral instruction rule, since their policy may not cover this specific crime. Likewise some homeowner insurance provides identity and other cyber theft, but may exclude this.
“The buyer hasn’t actually bought the house, yet, [rendering homeowner insurance on it null],” she said.
© CTW Features
