DON'T BE A VICTIM
Protect Yourself from Real Estate Wire Fraud
By Karen Queen, CAR
A
shley Jones knows the dangers of real estate wire fraud all too well. She and
her husband nearly lost $183,000, which was intended for an investment home
purchase, to an email scammer in one of the fastest-growing niches for cybercrime.
Only quick and persistent action, along with the scammer’s greed, saved Jones’ money. Most
victims never get their money back. “I never thought fraud would hit me,” Jones says. “My
husband and I were buying a duplex as an all-cash deal. We were sending the cash from
our brokerage account. We were in escrow, and I got an email with the wire instructions.”
That email, ostensibly from the escrow agent, was in fact from a scammer lurking in Jones’
inbox. The scammer deleted the authentic email and substituted a similar email of his own
with a key difference — the instructions were to wire funds to an account controlled by the
scammer. That’s when Jones’ nightmare began.
Wire Fraud Scams are on the Rise
Top Producing Team
Gilroy Intero, 2015-2018
Sean Dinsmore, Realtor
Intero Real Estate Services
www.TheDinsmoreTeam.com
408.710.2855
DRE #01966405
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Unfortunately, real estate is the second-
highest targeted industry for cybercrime,
according to the FBI. Most of these
crimes target buyers’ down payments.
From 2015-2017, there was a more than
1,100% rise in the number of email
account compromise victims reporting
issues related to real estate transactions,
and an almost 2,200% rise in reported
monetary loss. “It has jumped expo-
nentially in the past one to two years
because criminals have fi gured out the
best, most effi cient process to execute
the crime,” says Robert Siciliano, CEO
of CSI Protection, a provider of Cyber
Social Identity Protection certifi cation
training for agents. Another factor,
Siciliano says, is that the communica-
tions are generally unencrypted — and
no regulation exists regarding cyber-
security measures to force encryption.
“It’s only a matter of time before the
government steps in and regulates.”
Absent any offi cial regulations, it is up
to agents and their clients to protect the
clients’ interests.
Criminals gain access to the email
accounts of REALTORS®, escrow
agents and others in the industry via
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FALL/HOLIDAY 2019
data breaches or via phishing and
spoofi ng. Increasingly, cybercrooks
are getting into email accounts via
data breaches, Siciliano says. These
emails appear legitimate because they
are legitimate, since they’re coming
from the actual account as opposed
to a spoofed account. “All the crooks
have to do is sort the [hacked] emails
for RE/MAX, Century 21, Coldwell
Banker and other real estate companies,”
says Siciliano. “Once they’re in, they
can just watch and wait.” This type
of crime is on the rise partly because
the potential benefi t is high and the
risks are low. “Unlike robbing a bank,
wire fraud is fairly low risk,” says Paul
Benda, Senior Vice President of Risk and
Cybersecurity Policy at the American
Banking Association. “It can be very
lucrative. Criminals can walk away with
tens of thousands, even hundreds of
thousands of dollars.” While watching
the target’s email activity, the scammers
study their manner of communicat-
ing, noting commonly used words and
personal information about the target
and their contacts. That’s why emails
from these scammers do not sound like
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