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The real estate market gets hit with wire fraud scams

Illustration by Charlotte Wall

If you’re planning on making a down payment on a home anytime soon, listen up: Internet criminals are operating wire fraud schemes that could result in you losing your nest egg.

Rick Cenname, a sales manager with Equity Title of Nevada, says that as the number of real estate transactions has increased over the past several months because of increased market demand, so have the attempts to steal would-be homeowners’ money.

Perpetrators hack into email accounts mostly via sent emails phishing for passwords (think Clinton’s hacked emails—it’s a similar method), set up keyword searches and then find emails pertaining to the purchase of a home, specifically the transfer of funds. From there, they insert themselves into the process with fake emails containing alternate wiring instructions.

“Attempts are a daily thing,” Cenname says, referencing emails from “the bad guys” trying to hack into title and real estate companies’ systems. “Fraud is the next step. They are waiting for people to make mistakes.” According to the FBI, $2.3 billion was lost via business email compromise scams between October 2013 and February 2016.

If a consumer wires the money, there is little recourse. Banks do not insure wire transfers or confirm that a bank account number matches the intended beneficiary. And local law enforcement can offer little assistance. “The issue is that the FBI and the federal government, a lot of police agencies, have minimum thresholds in regards to the financial loss they will actually investigate,” says Sergeant Matt Campbell with the Las Vegas Metropolitan Police Department. “So, let’s say it was $20,000—which would devastate me—that doesn’t even meet the federal threshold. … Once that money is gone out of Clark County, I have no jurisdiction.”

“It comes down to the consumer being proactive,” Cenname says.

Watch for red flags

You should be wary of messages from free email services such as Gmail, Yahoo or Hotmail, especially if they do not match the primary email you have for your real estate agent or escrow officer. The same goes for phone numbers and addresses; they should always match the original information you receive. Wiring instructions that list a beneficiary other than the title company are another warning sign, and lastly, if a person is being pushy about wiring money immediately, don’t. “We don’t push to have the money wired to us. When you want to close is on your terms,” Cenname says.

Cenname shares four steps to protect yourself when buying a home:

1) At the beginning of the purchasing process, obtain the escrow officer’s phone number, and use only this phone number for discussing the transaction.

2) Do not wire funds unless you have called the escrow officer and confirmed the wiring instructions.

3) Avoid sending any personal information in emails or texts.

4 )Take steps to secure your email address: make sure you have a strong password, secure your Wi-Fi network and set up two-factor authentication.