Real estate scam continues to plague buyers, sellers & title companies, despite nationwide warnings.
Kelly thought she’d signed every document she needed to buy her condo in Vancouver, Washington.
But then in June, she received a new e-mail from her title company, with an attachment.
“It looked like every other one that I had opened, signed, and sent,” she told Archer News.
This message, however, was a fake.
Fakes like these are tricking buyers, sellers and title companies across the country.
In many cases, the crooks e-mail fake wiring instructions to fool people into transferring their house-buying or selling money to the thieves’ accounts instead.
Luckily for Kelly, the trickster’s timing was off.
Kelly said she received this e-mail that looked like it was from her title company on June 26. Image via Kelly/Archer News.
She bought her condo three years ago, so this new message from her title company was surprising — and suspicious.
She checked with her title company, Cascade Title Company of Vancouver, asking about this message that appeared to come directly from her escrow officer.
“I called and the receptionist answered,” Kelly said. “I let her know who I was and about the email, all she said nonchalantly was, ‘Oh, she got hacked, just delete the e-mail,’ and rushed me off the phone.”
That left Kelly with big questions.
“What information did the hacker get? Was it a simple contact list hack or do they have personal information?” she asked. “How many people got suckered?”
“No comment”
Archer News contacted Cascade Title for info.
“Thanks for your concern but I have no comment,” wrote Rhett Hendrickson, listed as Cascade Title of Vancouver’s V.P. Manager, in an e-mail.
If any Cascade customers fell for this kind of scam, they would not be the only ones.
Around the country, stories are popping up about how real estate wiring fraud has caused nightmares for people trying to buy and sell houses.
This illustration from an American Land Title Association video shows a fake e-mail designed to trick home buyers out of money. Image credit: ALTA
In Colorado, a couple said they lost their life savings when they were tricked into sending the money for their new house to a scammer instead.
The couple said someone hacked into the title’s company’s servers and sent them fake wiring instructions in April, leading them to transfer $272,000 to the thieves, according to The Denver Channel.
In Maryland, scammers duped a buyer into sending off more than $100,000, money the buyer never got back.
In California, a buyer lost more than $500,000 through real estate wiring fraud, according to a lawsuit filed over the case.
In some cases, the criminals hack into real estate professionals’ e-mail accounts, monitor until they see a closing in process, then pounce.
The FBI announced in May that there was a 480% increase in complaints filed by title companies that were targets of the scam in 2016.
In some cases, the victims have sued the title company or other companies involved.
Real estate by e-mail
In this digital age, doing real estate transactions by e-mail is not atypical.
“I remember back then thinking that it was so efficient and didn’t even think twice when opening the dozens of e-mails that went back and forth,” Kelly said.
This new e-mail fit right in, and she believes she could have fallen for it.
“I would have if I was currently in the process of signing closing papers,” she said.
Some malicious hackers monitor title company officer accounts to see when a house is going to close, then send out fake wiring instructions to the buyer. Image credit: BookBabe
Answers
Concerned, Kelly looked for more answers from the title company.
“I checked the website and there is no notice or disclaimer or anything,” she said.
No company e-mail or letter notifying her of the hack either, Kelly said.
That’s not what a national title company association recommends for businesses under attack.
“If a title company learns that is has been targeted in a phishing scam, they should inform their customers as soon as possible,” said Jeremy Yohe with the American Land Title Association.
“If the title company has a social media presence, they should announce the scam on their social media sites and warn customers to ignore suspicious emails or texts purporting to be from their company,” he added.
They can also inform customers by e-mail or letter, he explained to Archer News.
“The important point is to remind customers that legitimate businesses like theirs would never solicit sensitive personal information through insecure channels like e-mail or text messages,” said Yohe.
An illustration from the American Land Title Association shows a fake real estate wiring fraud e-mail. Image credit: ALTA
Warnings
The American Land Title Association is working to get the word out about the scam.
The organization put out its own warning, and is coordinating with other groups, like the Consumer Financial Protection Bureau, as well.
“It’s important to note that alerts from the CFPB [Consumer Financial Protection Bureau] and other agencies will not prevent wire fraud,” Yohe said. “The only way these alerts will help is if they are used to help educate buyers, sellers and real estate partners about the risks.”
“Ultimately, it comes down to professionals involved in the real estate transaction getting in the habit of talking about this risk at every opportunity,” he said.
Law
In some cases, professionals are required to talk about it.
In Washington, where Cascade Title is located, the law says businesses have to inform their customers of a data breach involving certain kinds of personal information within 45 days, with some exceptions.
For example, a company can decide that the data breach “is not reasonably likely to subject consumers to a risk of harm,” the law says.
Also, the company can delay notifying customers “if the data owner or licensee contacts a law enforcement agency after discovery of a breach of the security of the system and a law enforcement agency determines that the notification will impede a criminal investigation.”
If a company does not follow the law, the state can take action.
An American Land Title Association graphic urges people receiving wiring instructions by e-mail to call the title company to verify. Image credit: ALTA
Archer News checked in with Cascade Title again, asking if the hack Kelly described would fall under the reporting law or any of its exceptions.
We also asked about the American Land Title Association recommendation on informing customers as soon as possible.
This time, Cascade Title did not provide any kind of e-mail response.
If the company responds, we will update this report.
“Be suspicious”
Once you’re aware of this kind of scam, there are many things you can do.
“Be suspicious,” urges the American Land Title Association in its video for homebuyers and sellers.
“Be suspicious,” recommends an American Land Title Association video. Image credit: ALTA
Kelly’s suspicion lead her to eye the fake e-mail closely.
“First I looked at the sender, it did not follow the usual ‘name@company.com.’ Red flag!” she said. “Then I realized that there wasn’t really a title or anything in the body of the e-mail. Usually someone would put a description of what it is and why it needed attention.”
What to do
If you get an e-mail with wiring instructions, don’t hit ‘reply’ or call the phone number in the e-mail. Instead, call the title company directly, the American Land Title Association recommends.
Also, call the bank directly to confirm the name and account number on the account before wiring money.
And call the title company or real estate agent immediately to validate that the money went through.
You may have a time period in which you can issue a recall notice if the money went to scammers.
New steps
Some companies are taking new steps to help stop the crime.
Real Estate One has customers sign a disclosure form warning them about the crime and advising buyers and sellers about how to stay safe, said Dennis Pearsall, president of the Northwest Michigan and franchise divisions of Real Estate One.
“This is a very significant concern for our entire profession and we are constantly on the lookout for the next attempt,” said Pearsall told Archer News.
The disclosure form said Real Estate One will never send customers electronic communication with instructions on transferring fund for providing nonpublic personal information.
“Be especially wary of any change in wire instructions,” the document said. “Wire instructions rarely, if ever change. “
Real Estate One asks customers to sign a wire fraud warning & acknowledgement. Image credit: Real Estate One
Other companies
Some companies have created policies where they will not e-mail wiring instructions, according to Yohe.
He said some companies also:
—Put consumer warnings on websites & communications
—Use secured email communications
—Send notices to consumers & real estate agents saying that the title companies’ wire instructions will never change during the transaction
—Call buyers & real estate agents on a known number to verify wire instructions before transmitting
—Verify account holder information with the receiving bank before sending a wire transfer
—Put warnings in their e-mail signature ones, such as this one:
“Criminal organizations that perpetrate these frauds are continually honing their techniques to exploit unsuspecting victims, which makes constant awareness and education a necessity,” Yohe said.
Near miss
Kelly’s near miss was almost a collision.
Even though she bought her condo three years back, the e-mail from the title company looked legitimate.
“It took me a minute to realize who it was, and had a moment of panic thinking was something wrong?” she recalled.
“It’s been almost three years, what would I need to sign at this point?” she asked. “But I do know that things change, laws, taxes, etc., so maybe there was something going on in the real estate world I was not aware of.”
There is indeed something going on in the real estate world. And now she is aware.
She hopes other people will be aware, too, so their money goes to buy a house, not to a scammer’s bank account.
The Internet Crime Complaint Center and the American Land Title Association have information on what to do if you fall victim to this scam.