Capitol Title

Goldstein & Levy, P.A., General Counsel
Legal Bulletin

April 17,2017 | EMAIL WIRE FRAUD ALERT!

EMAIL WIRE FRAUD SCAMS CONTINUE TO INCREASE
AND JEOPARDIZE BUYERS, SELLERS AND THEIR AGENTS

We have previously advised you of the emergence of email induced wire fraud scams that have targeted home buyers and sellers who are in the process of completing settlement on the purchase and sale of property.  There has been a recent, significant increase in the number and complexity of the scams that have resulted in very significant losses of funds by sellers and purchasers and which could also expose unsuspecting real estate agents to liability as a result.  We have learned of several instances of the following scam this week which appears to have started with the hacking into the email account of the buyer’s agent in the jeopardized transactions:

The email account of the buyer’s agent is hacked into and the “fraudster” monitors the email communications that are exchanged prior to closing between the parties, agents, lender and title company. The fraudster prepares (or revises previously provided via email) wiring instructions and sends a bogus email to the buyer, purporting to be from the buyer’s agent, which instructs the buyer to wire funds to an account of the title company prior to closing.  The account information is fraudulent and the buyer’s funds, once received in the fraudulent account, are immediately transferred out to an inaccessible account overseas.

             We suggest that all participants in the closing process carefully consider the following:

  • Email should not be considered a secure manner of transmitting any sensitive information, including and especially information relating to transfers of funds.  We send wiring instructions to all purchasers by USPS “snail mail” when we open a file. If they lose the wiring instructions or want to discuss wiring of funds we recommend that they CALL US.
  • Every purchaser and seller should CALL THE TITLE COMPANY at a verifiable phone number to confirm wiring instructions BEFORE initiating a wire transfer to or requesting a wire transfer from the title company
  • Every purchaser and seller should CALL THE TITLE COMPANY at a verifiable phone number in the event they receive or request any change of wiring instructions BEFORE initiating or requesting a wire transfer
  • Agents should refrain from using non-protected, consumer email systems (such as gmail, yahoo, etc.) to transmit non-public personal information or any other sensitive, financial or funding information or instructions in connection with any transaction.  Only email systems that  incorporate firewalls and other, appropriate cyber security safeguards should be used for transmission of sensitive and confidential information of any kind.

To view or print our report please see our full pdf version.

Settle On Our Experience®...

This bulletin is for informational purposes only and is not intended as legal or tax advice to be used or depended upon in any specific transaction. All parties are advised to seek competent legal and tax advice / counsel with respect to these issues before entering into any transaction.

©Capitol Title Insurance Agency, Inc. 2010