The scammer will usually provide the false wiring instructions by email but will also use the phone or regular mail.Īs the victim is generally in the closing stages of a transaction-and expecting to send funds via wire transfer-they may not think twice when they receive fake wiring instructions from the scammer. While the exact methods fraudsters use when attempting wire fraud vary, the goal is still the same-impersonate a trusted party in a transaction in order to divert a wire transfer to a fraudulent bank account. Wire Fraud in Real Estate: What You Need To Know Because of this, it is important that real estate professionals know about the challenges they are facing. Wire transfers are unique in that once they are received in a bank account, they can be transferred out immediately. Through business email account compromise and sophisticated social engineering strategies, they have found a repeatable process for diverting wires from the intended destination to themselves. What they’ve learned is that large sums of money are frequently transferred by way of wire transfer between multiple parties. Over the past two years, cyber perpetrators have spent time learning about real estate transactions and the nuances of how money is transferred in connection with closings. While some of this will have been recovered, it points to a worrying trend. This represents a significant increase in wire fraud activity over the past two years as most attempts go unreported. According to information recently obtained from the FBI, from June 2016 through December 2018, roughly $90 billion in attempted wire fraud was reported through the FBI’s IC3 division. Wire fraud is an epidemic in the real estate industry.
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