Understanding the Risk of Wire Fraud in Real Estate Settlement Services

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The real estate industry has been under attack from scammers trying to turn buyers and sellers into victims. With the click of a button, a buyer’s funds can go straight into the hands of a fraudster —- with no way to reverse it. 

While there are steps you can take to protect yourself, the risk of wire fraud in real estate settlement services is very real. Here is what you need to know. 

How Does Wire Fraud in Real Estate Work?

Wire fraud in real estate settlement services involves a scam in which the one committing the fraud changes the bank account information on the wire transfer instructions. Except, they don’t just go in and change it themselves —- they convince the buyer to re-route the money. 

How can they possibly do this? 

Their tactics vary. But, for most, they use email phishing. They create fake emails and contact information in an attempt to pose as someone you trust. For instance, your title agent or realtor. 

If done well, you may not even realize that the person sending you the email was anyone other than who they say they are. So, when they tell you there has been a change in the wire instructions, why would you not believe them? Unfortunately, if you try to be cautious and call the number in the email to verify, it will ring directly to the scammer.

Keep in mind that hackers can spoof phone numbers, too. In this method, they will call and pretend to be from your title company or another trusted party. Your caller ID will show it is that person calling. Because it looks legitimate, when they provide you with updated wire instructions, you will likely comply. 

Reduce Your Risk of Wire Fraud

Before you move forward with residential closings in Pennsylvania, be sure to have precautions in place so that you don’t find yourself the victim of real estate wire fraud. Below are a few steps you can take to reduce your risk. 

Talk To Your Team

Your title team is there to facilitate the closing process and answer any questions you have along the way. Take advantage of the opportunity to discuss what you can expect through the closing with your title team, your realtor, and your lender. 

Gaining an understanding of the process will help you to be more aware when something occurs that you weren’t expecting. 

Keep Contact Information in a Safe Place

Never use the contact information provided in an email or voicemail you receive while going through the home-buying process. Instead, write the correct contact information down for your realtor, title company, and lender and set it aside. This way you always know you are reaching the correct party and can stop a scam before it happens. 

Confirm Last-Minute Changes

As you are getting closer to your settlement, things can start to get a bit chaotic. There is, after all, a lot that goes into this day. And while you are anxious to get through it, you still need to be hyper-vigilant as this chaos presents a prime opportunity for fraudsters. 

Should anyone contact you with last-minute changes about your wire transfer, never take action until you have confirmed it using the proper contact information. 

Billions of dollars were lost in wire transfer scams last year — don’t let this happen to you. 

Buchanan Settlement Services is a full-service title company serving the needs of homeowners, sellers, land developers, lenders, attorneys, and real estate professionals.