Sharing is caring―but not when it’s your life savings
How to keep wire fraudsters out of the mix when buying a house
After saving up for more than 10 years, Suzanne was thrilled and relieved when she completed the transfer of more than $60,000 for the closing of her home purchase. About two hours later as she was celebrating with her sister over margaritas, her agent called and said he wanted to give her detailed instructions for transferring her money. “Wait,” panicked Suzanne, “who did I transfer my money to this morning?!”
Today, real estate wire fraud is one of the fastest-growing cybercrimes in the United States, and its aftermath can be devastating. According to a recent FBI report, in 2017:
- The FBI received 301,580 complaints, with total losses in excess of $1.4 billion
- More than 9,600 consumers were victimized in the real estate sector ($56 million in losses)
- More than $675 million was lost due to the compromise of business email accounts
Know this: Your email account can be an accomplice to theft
Scammers can compromise email accounts by assuming the identity of someone you know and trust, like your real estate agent, financial institution, or title company. Using this fake identity, thieves send you wire transfer instructions that will direct your money into their own personal accounts. This technique resulted in a 480% increase in wire fraud complaints in 2017. That’s huge. And scary.
Real estate wire fraud is a big moneymaker for fraudsters right now, and they’re clearly taking advantage of the opportunity. Scared, stressed, or giddy buyers who are itchy to transfer their entire life savings to complete a property purchase provide the perfect environment in which fraud can flourish.
Cue the Mission Impossible theme
The government, however, has taken steps to squash this kind of theft, and prosecute offenders. In June 2018, authorities announced an initiative to specifically target wire transfer cybercrimes. In its initial sweep, Operation WireFire recovered $14 million in fraudulent wire transfers, resulting in more than 70 arrests in the US and abroad. It’s great start, but buyers still have to be hypervigilant.
PRO TIP: Protect yourself from wire fraud before it happens, because
once you authorize a wire transfer, standard legal protections may not apply
CHECKLIST: How to protect yourself against real estate wire fraud
- Ask your agent if you can deliver funds at closing personally, with a certified or cashier’s check
- Be suspicious of any last-minute changes to closing procedures
- Never trust closing instructions received via email; confirm everything via phone with your agent
- Enable two-factor authentication on your email account—and encourage those with whom you do business to do the same
- Only contact your agent or real estate firm using the number on their business card or website if last-minute changes are requested–never verify using the phone number included on an unexpected email
- Ask questions (and make sure you get answers) about the security of the payment method your agent uses
- Only use a secure, encrypted file transfer or messaging service when you have to share information like bank account details or social security numbers
Keep your life savings safe with encrypted sharing
Purchasing a home or property is stressful enough—don’t let it turn tragic by becoming a victim of wire fraud. When preparing for a large-scale financial transaction, it’s important to advocate for yourself. Make sure you’re sharing your personal financial information in the most secure way possible. Look for a system that offers strong encryption, and that will completely destroy your account information after you send it.
Built upon the next generation of secure messaging technology, the Dust messenger provides a safe and encrypted way to send messages―and eliminates any trace of your information once you’ve shared it. When you need to share your financial information, share it securely with Dust.