Buying or Selling a House? Wire Fraud Scams Hit Close to Home
Scammers continue to change their tactics in order to steal money from you. The newest scam targets you during your real estate closing. Buyers and sellers exchange numerous emails regarding the buy/sell process with the real estate agent, attorneys, paralegals and mortgage broker. If you are not careful, you could lose your closing funds to a scammer’s fraudulent account.
A scammer will compromise the email of one of the parties involved in a real estate transaction. The scammer generally sits and waits, and monitors all of the communications until they find the right time to take action. Scammers use a technique called “spoofing” to make themselves seem more legitimate. Spoofing occurs when a scammer uses software to mimic a trusted party to the transaction. When the scammer calls or emails you from a spoofed account, it can look exactly like you’re talking to someone you trust. The National Association of Realtors (NAR) reported more than 13,000 people were victims of wire fraud in the real estate and rental sector in 2022, with losses of more than $213 million – an increase of 380% since 2017, according to FBI data.
Recently, MCCM represented the seller in a real estate closing. The buyer was told to bring a certified check to closing, but received an email instructing the buyer to wire the closing funds. The email looked like it was sent from a party to the transaction and the buyer never called anyone to verify that the funds were to be wire transferred. Unfortunately, the buyer was scammed into wire transferring the closing fund to a scammer’s fraudulent account. As of today, the property has not closed and the buyer is trying to recover his money.
Are there steps that you can take to prevent this from happening to you? Yes. At the start of the real estate process, write down the phone number, business name and email address of all of the parties. At the beginning of the real estate process, speak with your real estate agent or attorney, either in person or over the phone, to understand the closing process. Avoid communicating about the closing process or payment amounts required for closing in an email. Beware of any last minute changes. If you do get instructions to change the payment method for closing, pick up the phone and speak with someone in-person to verify that the changes are legitimate. Remember to call the phone number on your original list; the email may include a fake phone number.
Be cautious, and never provide your banking information in an email or over the phone. You should stick to in-person meetings to share important information. If you are a victim of wire fraud, contact your bank as soon as possible; this may increase your chances of getting your money back. You should also report the fraud to the FBI’s Internet Crime Complaint Center.
MCCM encourages you to share this information with your friends and family.
This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.
McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979. With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.
We represent a diverse range of clients located throughout New York State and New England. They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts. For more information, please contact us at 585.546.2500.