Our world runs on electronic transactions and, as a result, criminals have figured out how to target online or electronic transactions to commit fraud. In fact, they have become quite savvy in tricking consumers into moving money into false accounts. Unfortunately, once the money has been moved, it is nearly impossible to recover it.
Real estate transactions are a primary target for fraud because transactions often involve wire transfers and large sums of money. It's this combination that makes real estate prime for a fraud disaster and, needless-to-say, it can be quite devastating for all involved.
How do criminals trick you?
There are several ways for a criminal to commit fraud against your transaction but it really comes down to the criminal doing something that causes you to change the bank and/or account information for the wire transfer - sending the money into the criminal's account instead of the escrow agent's account.
The criminal may send an email disguised to look like an email coming from the attorney or real estate agent. It may have your name or the attorney's name or the agent's name and they may create an email address that is only slightly different than the real one. They will use information they find either legally or illegally to make you believe the information is coming from a trusted source. Once they have fooled you into believing the email is legitimate, they will tell you that the wiring instructions have been updated and to use the new account information. Don't be fooled!
How To Prevent Fraud
The best way to prevent fraud in real estate transactions is to use certified funds instead of using a wire transfer. If you have to wire funds, make sure the information is coming from a trusted source and call to verify the information over the phone with the escrow agent.
"Our buyers receive so much information from so many different sources that it's easy to not notice when an email is suspicious. That's why we encourage them to be careful and seek validation from us or their attorney."
The "Kelomi Way" - a concierge-style approach
At Kelomi, Inc., we recommend using certified checks whenever possible as it is the safest way to transfer money to the escrow agent.
Whenever it isn't possible, we take extra steps to ensure the wire transfer information is correct and untampered. We will print the instructions and hand-deliver them to you, whenever possible. If we have to email them to you, we will call to verify the account information over the phone. We advise all of our clients to alert us immediately if they ever receive wiring information that conflicts with what we've provided. We will NEVER change the wiring instructions without speaking directly with you over the phone or in person.