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Protect Yourself from Being a Victim of Wire Fraud

eFraud Prevention Dec 22, 2023
Learn how to protect yourself against being a victim of wire fraud.

Be vigilant when it comes to wire transfers and verify the information from trusted sources. If you receive an email, you need to make sure it’s from a trusted source. If you receive a text, you must make sure it’s from a trusted source. If you receive a call, you need to make sure it’s from a trusted source.

Follow the tips below to prevent wire transfer scams:

  • In real estate transactions: The seller should sign the wiring instructions, and the signature should be notarized, if possible. Even then, the seller should verify the closing instructions over a phone call initiated by the law office, using contact information received prior to any discussion of proceeds and wires. Confirming a phone call verification via email is a good practice and a great way to document the file, but email verification alone is inadequate.

  • Verify every wire request:  The more personal the verification, the better. Have the seller sign wiring instructions at the closing ceremony in the presence of an attorney. If the seller cannot attend the ceremony, the wiring instructions should be included in the deed package.

  • Review emails and verify instructions:  If wire instructions are received via email, mail or phone, you should always verify you are speaking with the right party by meeting in person or following a call-back procedure using a phone number from a third-party source. This practice will ensure you are confirming with the correct individual. If wiring instructions are ever changed, you should presume the change to be fraudulent. Review the modified instructions in detail for any inconsistencies and always follow a call-back procedure.

  • Advise buyers to not accept wiring instruction changes:  Hackers target emails with wiring instructions. Then, they use this information to send a modified email with updated directions for wiring money into their personal account. This type of scam is not covered by E&O insurance, so it is extremely important for real estate professionals to protect themselves and their clients in this situation.

  • Verify the authenticity of wiring instructions sent from a free email service: If wiring instructions are attached to an email from a free service like Gmail, Yahoo, or AOL.com, you should assume they are fraudulent. Sometimes, hackers set up an alias account with a very similar name to send modified instructions. Examining the account name in detail is a good idea. Because the hacker already has access to the original account, he or she may use the same account in all other correspondence.

  • Be cautious of using free email accounts:  These accounts have major security issues, and they are likely being mined for data by their providers. Plus, they may be in violation of the Rules of Professional Conduct. If you are currently using a free service, find a more secure and professional alternative. 

  • Beware of unusual activity:  Be wary of wires going to any account that is not in the name of the seller. Also, be suspicious of any account with a geographic location different than the seller. There are possible explanations for different names and odd locations, but these red flags should be explored in detail, not via email.

  • Be extra cautious when sending wires overseas:  Once money leaves the United States, it is likely gone forever.

  • Regularly change your passwords:  Updating your password on a regular basis ensures someone can’t acquire your password and use it to access your private accounts.

 

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All content is for informational purposes only and does not constitute legal, tax, or accounting advice. You should consult your legal and tax or accounting advisors before making any financial decisions.