Imagine you have worked hard for years in pursuit of homeownership. You put money aside, built up a nest egg and shopped around for your dream house. When time comes to close the deal, you follow seemingly legitimate instructions for transmitting money electronically.
But instead of picking up the keys to your new home, you are told the seller never received the funds.
Local real estate professionals are spreading awareness about the increasing prevalence of attempted wire fraud during the home-buying process. Two attempts at defrauding local parties involved in a settlement were reported in one week earlier this year, the Frederick County Association of Realtors said in a statement this month.
Criminals engaged in a sophisticated type of cyber fraud have increasingly been targeting buyers, sellers and others involved in house sales, Karen Highland of the Association of Realtors told The Frederick News-Post.
The scheme usually works like this: Criminals hack into a real estate agent’s email account and monitor conversations with prospective homebuyers. When the final settlement is imminent, the hacker sends an email, usually to the buyer, containing fake money wiring instructions.
“They hack into the agent’s email and watch for a while and pick up the language and the detail of who the agent is working with,” Highland said. “Usually, the day before the settlement or the morning of, they send emails to the clients posing as the agent and the agent never sees it.”
Criminals are using software to mask their email addresses as the addresses of real estate agents, Highland said. So, when homebuyers see the wiring instructions, there is little reason to doubt their authenticity.
The Realtors association received two reports of this in one week, but according to other area and national real estate professionals, it is a common problem that happens all over the country.
Todd Hylton manages Excalibur Title & Escrow LLC, which works on real estate deals in Frederick and Montgomery counties. His company started noticing this kind of scam three years ago, he said. Now Excalibur gets emails from people attempting wire fraud on a weekly basis.
Excalibur has taken a proactive approach to prevention, Hylton said. All of his employees use their company emails on their secure server. They transmit documents through encryption software, and every message is archived. A disclaimer at the bottom of every email warns Excalibur clients against accepting wiring and disbursement through email and recommends confirming instructions over the phone.