October 19, 2020
By: John L. Mashack
October is Cybersecurity Awareness Month. The following story illustrates a particularly dangerous type of internet fraud prevalent in the real estate industry.
A Northern California family’s experience buying their dream home turned into a nightmare when they became victims of a real estate wire fraud scheme. The fraudsters intercepted emails between the buyers, their real estate agent, and the title company, and sent fraudulent wiring instructions to the buyers. On closing day, the buyers wired over $920,000.00, thinking the wire had been sent to the title company. Instead, their life savings went halfway across the world to the fraudsters’ bank account. Fortunately in this case the family eventually recovered their funds and were able to close on their dream home, but this should serve as a warning for anyone wiring funds for their home purchase. Fraudulently diverted funds cannot always be recovered.
Internet fraudsters are becoming increasingly sophisticated in perpetrating their wire fraud schemes, so you need to always be careful when confirming the wire instructions you received are legitimate. Real estate wire fraud is on the rise in recent years, with more than $221 million in losses last year, according to the FBI’s 2019 Internet Crime Report.
This is why we will send our wiring instructions either via encrypted email or fax only, and you must call our office prior to wiring funds to verbally verify any wiring instructions that you receive from us. As in the story outlined above, in some cases even emails that look like they are coming from a title company could be fraudulent.
Please call us at (703) 737-3800 if you have any questions about wiring cash-to-close funds or if Loudoun Commercial Title can be of any other assistance.
If you feel you have been a victim of internet fraud, call 911 immediately or visit the FBI’s Internet Crime Complaint Center (IC3).