February 24, 2016
According to the National Association of Realtors, all parties engaged in real estate transactions should be cautious of emails requesting wired funds. Recent trends show that real estate transactions have increasingly become the target of a sophisticated phishing scam, commonly known as “spear phishing.”
The hackers break into email accounts seeking information about current or upcoming real estate transactions – looking for names and identifiable information of sellers, agents, buyers, title companies, or attorneys. The hackers then use this information, while posing as a party to the transaction, to request a wired funds deposit into their account. Sometimes the hackers will use an email address that is different from the sellers email address by one letter, which goes unnoticed by the buyer. The victim, believing the wired funds deposit is for closing, unsuspectingly transfers the funds and the hacker makes off with money.
Many people are lured into a false sense of security that hackers only go after large companies, like Sony, Target, Home Depot, and eBay. However, small businesses and home buyers are much more susceptible to “spear phishing” because they lack the sophistication, technology, and legal assets to prevent such attacks.
“Spear phishing” involving wired funds in real transactions has occurred in numerous states and defrauded large sums of money from its victims. According to an article by Sam Silverstein in Realtor®Mag, multiple incidents of fraud were reported in North Carolina, including an incident involving a $200,000 loss. A separate article by Rose Meily in the San Jose Mercury News mentions a first time buyer losing $13,000.00 to a spear phishing scam.
However, there are ways to prevent or guard against spear phishing. Here are some recommendations:
- remain vigilant to suspicious activity during a real estate transaction
- always call to verify all the information before a wired transfer
- develop a face-to-face relationship and/or voice contact with parties involved
- exchange and verify contact information of parties involved
- maintain communication with parties involved
- maintain strong email passwords
- change email passwords
- use two-step verification for emails
- encrypt emails and documents
- clean out email accounts
- use data security programs and anti-virus software
Let our real estate team “make a difference” for you in your real estate transactions. Contact Dylan Sizemore (513-943-6659) or Isaac Heintz (513-943-6654) to assist in your real estate needs.