The Silicon Valley Association of Realtors is alerting buyers and sellers to a recent scheme that involves the wiring of funds directly to escrow.
Potential buyers have received emails allegedly from a title company or attorney providing wire information to transmit earnest money for an upcoming transaction. Hackers have intercepted the messages and altered the account information in emails to redirect the buyer’s funds to the hackers’ account.
“Cybercrime is an unfortunate reality these days and has become a potential threat in real estate transactions, as many sensitive documents are transmitted between and among several parties,” said David Tonna, president of the Silicon Valley Association of Realtors. “We want to alert our clients to the dangers that are out there and suggest ways to help them keep their information intact,”
Hackers scamming the victims apparently monitored the email traffic of either the title company or the customer and discovered the timing of upcoming transactions. While in the reported instances customers were induced to misdirect their own funds, an altered email could conceivably be used to cause rerouting of funds by any party in the transaction, including the title company itself.
The danger of hackers monitoring Internet traffic and intercepting emails from escrow officers to buyers, then altering the wiring instructions to misdirect the buyer’s funds into the hackers’ own accounts, is cause for concern, according to Tonna. In such a wire fraud, if buyers transferred funds pursuant to the altered wiring instructions, their money could be stolen with little or no chance of ever being recovered.
Conversely, if sellers are to receive their sales proceeds by wire transfer from the escrow holder to their bank, the same type of fraudulent activity could occur.
To protect funds and avoid identity theft, association members encourage clients to take immediate steps to secure their computer systems and email accounts to safeguard transactions. Buyers and sellers should confirm all email wiring instructions directly with the escrow officer by calling the escrow officer on the phone ahead of time. During the conversation, the correct account number information should be confirmed verbally before taking any steps to have the funds transferred.
“If there is any indication that buyers, sellers or anyone else has received questionable wiring instructions, the parties should promptly notify their banks, realtors and escrow holders,” Tonna said.
Residents can also use the following resources to protect against cybercrime.
• FBI at fbi.gov.
• Internet Crime Complaint Center at ic3.gov.
• National White Collar Crime Center at nw3c.org.
• On Guard Online at onguardonline.gov.