Protect yourself from wire fraud
Dear Mr. Feichthaler,
I am planning on purchasing a property in Cape Coral soon. I have read a lot about wire fraud and I have concerns about sending my money by wire to the law firm handling the title work. Do I have anything to worry about?
In a word, YES! Wire fraud can potentially victimize any party to a real estate transaction. The buyer, who is tasked with sending the most money for that purchase, must be particularly vigilant.
The main way scammers are working to take your money is to send a “phishing” email. Typic-ally, the email will appear to be from a trusted source, perhaps Microsoft or a company like Ama-zon, stating you must click the link for an important reason. For instance, it may state your delivery won’t occur, your account will be frozen or other consequences that sound terrible. Key number one is to not click on any link or attachment unless you are certain where it came from.
If a scammer successfully hacks into your or your Realtor’s email, they will be able to read everything coming into it. Notably, they may be able to access the wiring instructions sent to you by the closing agent. If so, they may be able to intercept the official communication so you never received it. They then alter the document to provide for different wiring instructions, then send it to you from what looks like a legitimate email address, but may have a slight misspelling or other sign of fraud.
Nearly every Realtor uses standard email accounts like Google, Yahoo, AOL and others. These email addresses can be targeted, with the fraudulent party knowing a Realtor’s email account can be fertile ground for sensitive information.
There are many steps you can take to avoid being a victim of fraud, but I consider the following most important: Call and personally speak to the firm that will be handling your title work as soon as the contract is signed. Obtain their contact information from your Realtor. They should provide to you and confirm information on their wiring instructions so you can confirm them. A closing agent will NEVER change their account information mid-transaction. The scammers, knowing you have received the proper instructions initially, will often send the “new” instructions with some sort of excuse why. If names on wiring instructions change, either the bank or the name of the company, this is a clear sign you have false instructions. NEVER accept wiring instructions that have changed during a transaction.
When you do initiate the wire, you should CALL the closing agent to advise them it was sent. They will advise you when they receive it. By giving notice of the wire being sent, if the closing agent doesn’t receive it due to fraud there is the better chance of recovering the funds. To be clear, the best protection from wire fraud is prevention.
If you believe you sent a wire to a fraudulent party, the first step should always be to contact your bank to advise them and request an urgent recall of the wire. After that, the FBI and local police should be contacted. Although there is hope the wire can be reversed, every second counts in attempting that recall. Once the money leaves your account, if it is sent to a fraudulent party, it will not remain in their account long. Put another way, there is minimal likelihood you will receive your money back. Adding insult to injury, you would still be responsible to purchase the property you contracted for, which could lead to the loss of the initial escrow deposit you placed.
With regard to protecting your email account in general, changing passwords and adding two-factor authentication is a great first step to protect your information. If you often engage in financial or real estate transactions, it may be a good idea to contact a professional Information and Technology company to assist you in protecting your accounts.
Don’t be a victim. Diligence is key to protecting your money and passwords in all situations, but particularly in real estate purchases. Before sending that wire, you must be 100% sure the instructions are authentic.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at firstname.lastname@example.org, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.