The Growing Problem of Wire Fraud

Real Estate Podcast with John Quinn

In the real estate industry, wire fraud has lately become an increasingly prominent issue—especially for homebuyers. It used to be that when you bought a house, you’d just bring cash to the closing table. Later, people began using personal checks, but as fraudulent checks become a problem, we started moving toward cashier’s checks or certified funds. Nowadays, however, most closing attorneys and title companies require homebuyers to have their money wired before they even show up to the closing table. This is a great development, and it usually works out wonderfully. Usually. “Unfortunately, once that money has been wired, it’s gone, and you’ll never see it again.” For attorneys, the problem now is that hackers are accessing the email accounts of buyers, attorneys, and real estate agents to search for people who are in the process of making a very large purchase—so large that it requires them to wire the money to another party. For example, suppose an attorney emails wiring instructions to the buyer who’s ready to close on the house; the hackers will pick up that information, change a few details in the document, change the wiring instructions, and then send an exact duplicate of those wiring instructions to the buyer. That buyer will then use those fake instructions to wire the money to the hacker instead. I’ve seen how much damage wire fraud has caused to some buyers. Generally, we’ll stop the sale of a house in these cases, but the buyers are out likely a lifetime’s worth of savings. That’s why it is absolutely critical to verify where your money is going and that you check all the numbers before you send it to the bank—because, unfortunately, once that money has been wired, it’s gone and you’ll never see it again. If you have any questions about wire fraud or how to make sure that your purchases are secure, don’t hesitate to reach out to me. I’d love to speak with you more!