Buyers: Watch out for this new hacking scam that could swipe your closing funds

By Virginia K. Smith  | April 7, 2016 - 9:59AM

Scammers and cyber-thiefs are nothing if not inventive, and lately, yet another dangerous scheme has been making the rounds in the world of real estate, as The Real Deal reported earlier this week.

In a new spin on phishing, in which hackers impersonate businesses to dupe consumers into doling out personal information, scammers have been hacking into the email accounts of real estate agents and keeping tabs on the progress of a sale. When it comes time for the closing, they impersonate the agent, and use their email to send the buyer false instructions of where to wire their closing costs and down payment cash. The trick has resulted in buyers all over the country sometimes losing hundreds of thousands of dollars of their money, with little to no hope of recovery.

And rather than an email in garbled English requesting that you kindly wire cash to the deposed prince of Nigeria, the thieves behind this new generation of phishing are able to convincingly imitate a real estate agent after monitoring their emails.

Thankfully, the steps to protect yourself from this new scourge are pretty straightforward. (And many of these attempted thefts have been detected in time, before buyers fork over their hard-earned cash.)

The Federal Trade Commission has a number of tips on their website, the first of which is not to send sensitive financial information over email. "Email is not a secure way to send financial information, and your real estate professional or title company should know that," warns the FTC.Also, agents should never be sending money wiring instructions via email, so if you do get such a request, consider it a giant, waving red flag.

One broker who spoke with TRD recommends that brokers inform clients in writing that they will never be contacted via email with requests to move money. Buyers should also clarify with their agents at the start to see how the process of buying and closing plays out, including financial transactions. Regardless, if you do get instructions for wiring via email, call your agent at an established phone number—or, better yet, in person or via your attorney—to confirm that the correspondence is, indeed, legit.

The FTC also recommends being cautious about opening attachments or downloading files from emails if you're unsure of what they are (hackers can use files to get malware onto your computer), and staying on top of updates to your operating system, internet browser, and any security software you have. Also, if you're entering financial information over the internet, make sure you're on a secure wifi network (not the free, public wifi of the coffee shop downstairs, for instance), and look for a URL that starts with "https" (this means that it's secure). "Instead of clicking a link in an email to go to an organization's site, look up the real URL and type in the web address yourself," says the FTC.



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