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Wire Fraud…What is it? by Homestead Escrow, Inc.

Posted by admin on May 25th, 2018

Categories : “How to’s”, Business Features, Industry News / Trends / Reports / Features

Industry : City, Community, Government, Law, Marketing, PR, Real Estate

As businesses further digitize, the threat of wire fraud keeps businesses and customers at risk. A person can scheme to defraud or obtain money based on false representation or promises, using electronic communication. Every piece of information about your business and customers could be potentially breached. Homestead is heavily invested in cybersecurity and the most up-to-date policy standards available. The security of their customers is held to a high standard, which is why Homestead proactively consults with specialists within the FBI’s Cyber Crimes division, as well as leaders in the Information Technology Field. When it comes to wire fraud there are two tactics to look out for spoofing and phishing.

Spoofing

Hackers identify the email accounts of real estate agents and brokers. They hack directly into the accounts and identify emails referencing pending real estate deals. Through these email chains, hackers can obtain specific details regarding the deal, such as the parties’ names, the title company involved, the escrow officer in charge of the deal, and other information specific to the transaction.

Next, they send fraudulent email directly to the buyer or lender; making it seem like it was sent from the real estate agent, mortgage broker, or escrow agent. These fraudulent emails now direct the buyer and/or lender to wire the funds necessary to close escrow directly to a different bank account than provided in the preliminary report or in the escrow instructions. The hacker is in control of the new bank account without the title company or the escrow holder knowing.

Then, if the buyer or the lender does not detect the fraud, the money is wired to the fraudulent account controlled by the hacker and is immediately withdrawn. The money is almost always irretrievable.

Phishing

The most common attack method is the “phishing” email. The hacker sends an email that appears to be from a lender, real estate agent, or someone wanting to open an escrow. The email contains a link that is supposed to provide loan documents, real estate contract or other information. Once the link is opened, malware infects the escrow agent’s email system. The hacker then is able to read and see all incoming and outgoing emails and alter them when funds are about to be sent. They also have access to any forms, instructions, signatures, etc., that are sent by email. Hackers have even duplicated a bank’s wire receipt confirmation telling the escrow agent that incoming funds were in their account when they were not.

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