Email scam targeting real estate industry gets worse
A scam that targets the real estate industry is stealing thousands of dollars from unsuspecting home buyers. In some cases, hundreds of thousands.
Since I first warned about this scam last spring, real estate and cyber security experts says it's become a growing, nationwide threat to consumers.
The escrow wire transfer scam was the topic at a recent continuing education class at the Seattle King County Realtors office in Bellevue.
"These scammers get into your email account," said the organization's president, Sam DeBord. "They find your consumers' information. They know about their transactions and they know when that closing date is."
DeBord said scammers gain access to client information by creating fake email accounts using the names of legitimate agents, like him, to contact people in the real estate industry.
DeBord recently discovered his name was being used by scammers trying to get agents to respond.
"In my case, they just set up a bogus email account! I wasn't hacked," DeBord said, adding that the names and contact information of people in the real estate industry are easily accessible to everyone online.
Real estate agents who respond, by opening a link, downloading a file or even replying can open the door to a gold mine of names, closing dates and money.
"As soon as the scammer has access to your email," DeBord explained. "They can not only read the emails that you're getting today, but they can read those in the future, by setting up a forwarding setting."
By tracking email exchanges they know who's buying, for how much, what the pay-off amount will be, and the timing of closing.
That's likely how Paul Strohmeier and his wife nearly lost their waterfront dream home last year. As closing day approached they got last-minute closing instructions by email from the title company.
The names and information were all correct. But, the email was not from anyone at the title company at all.
A title company impostor who had all the right information was trying to get them to wire their closing money to a new account in Texas. Had Strohmeier not called his title officer to ask questions, he would have lost everything, including all his money.
"Unfortunately, I've heard of a situation where a buyer lost the entire purchase price in a cash transaction," DeBord told Realtors.
Reports of huge home buyer losses are putting the entire real estate industry on notice.
"I don't expect this scam will go away anytime soon," said cyber security expert Kip Boyle by email.
As founder and CEO of Cyber Risk Opportunities, which advises businesses on reducing their cyber risks, Boyle urges title companies to make their staff aware of the scam and strengthen their processes to block the hackers.
Boyle's advice to home buyers: Never send financial information, including account numbers, over email. And always verify updated closing instructions in person or with a phone call, never by email or fax.
Boyer adds that since hackers typically use a phishing attack to gain full access to your email account, everyone should be very cautious about opening file attachments and clicking on unexpected web links.
Real estate professionals should also be aware of their potential exposure to legal claims if clients lose their money to the scam. Attorneys say last year, a California real estate broker was sued for $513,000. The suit alleges the broker's failure to secure his email account led to a fraudulent wire transfer.