Closing on a Home? Protect Yourself from Wire Fraud

Aug 201919

Closing on a Home? Protect Yourself from Wire Fraud

You’ve heard the horror stories – someone buying a new home receives what looks to be a legitimate email telling them where to wire the funds for closing. They wire the money and then find out the email actually came from a hacker and their funds are gone.

Those who are most vulnerable to this type of wire fraud are clients who are in the process of purchasing a home. It’s often referred to as a mortgage closing scam, business email compromise or email account compromise fraud. Some of the latest wire fraud techniques involve cyber criminals contacting buyers as early as within the first few days of contract ratification.

How does it happen?
Cyber criminals hack into email systems and monitor communication about transactions. The fraudsters then pose as one of the parties involved in the transactions, emailing the clients about a change in the wiring instructions. These criminals use information they’ve stolen to make changes to account numbers or payment methods to divert the money.

How can you protect yourself?

  • Work with a title company like one of Long & Foster Settlement Services Partners who utilize a secure online portal and have safeguards in place to verify clients’ identities and accounts multiple times before pushing transactions through. Ask your title company what measures are being taken to keep transactions safe and whether they follow industry best practices.
  • Contact your agent, mortgage consultant or settlement company first. If you receive an email with new instructions for wiring money, wait before taking any action. Even if the email appears to be real, contact a trusted representative by phone first to ask if the information came from them or is a possible scam. Don’t use phone numbers or other contact information that came in the email.
  • Never email your financial information to anyone. There is no way to ensure an email is secure and it leaves your financial information vulnerable to criminals.
  • Ask your agent what they and their brokerage are doing to prevent fraud. Long & Foster agents, for example, have clients read and sign an Anti-Fraud Disclosure Statement. This outlines company policies so clients can be assured we will never send requests to transfer funds or to access banking information and to ignore emails they receive requesting this information.
  • Remain aware and vigilant. Learn more about what you can do to avoid mortgage closing scams by visiting the Consumer Financial Protection Bureau. You can read their advice here or watch a video of tips here or below.