Can you imagine going to close on the new building you’re purchasing to expand your business or an investment property to start your real estate portfolio only to learn that your down payment and/or closing funds have disappeared? It’s hard to imagine, but it’s happening now more than ever. Hackers are infiltrating just about every industry at an alarmingly fast rate and scams are now prevalent in the real estate industry targeting money being transferred during the closing process of a real estate transaction.
This type of scam is known as wire transfer fraud. While scammers use various methods like email phishing, social engineering, and malware, the end-goal is the same – to compromise the computer or email of a person or business involved in real estate to be able to monitor upcoming transactions. This allows the fraudsters to impersonate that individual or business and try to intercept funds.
Wire transfer fraud often targets individuals who are nearing the closing date on their mortgage loan as the scammers know that significant funds are available and a request to transfer the money would not raise a red flag. The purchaser receives an email that appears as though it is from their real estate or settlement agent. The email claims there has been a last minute change in the closing procedure and provides wiring instructions for the down payment and/or closing costs. The con artist uses this email to trick the unsuspecting buyer into wiring the funds into the wrong account.
Are you in the real estate market? Being aware and cautious is key to preventing this harrowing crisis. Don’t trust emailed closing instructions without verbal confirmation from your contact, and be especially suspicious of last-minutes changes to the procedure. Perpetrators make minor changes to email addresses that mimic legitimate email addresses so if you receive updated instructions, make a phone call to your contact to confirm. Do not use the phone number provided in the email, as that may be compromised, use a phone number you know to be accurate from past use or an internet search.
Fraud is a real threat to consumers and businesses making it increasingly important to work with a trusted advisor for financial transactions. The experts at Univest have experience helping consumers and businesses achieve their financial dream securely. If you have a financial question, need or concern, contact us at 877-723-5571.
Univest Bank and Trust Co. is Member FDIC, Equal Opportunity and Housing Lender.