In the past few years there have been thousands of data breaches, like the recent Equifax breach, resulting in billions of personal records being compromised, including email addresses, usernames, and passwords. Recently, I presented information security programs to hundreds of real estate agents. During the event, I took them to a website called HaveIBeenPwned.com. This website will show you if your email address has been associated with any data breaches. Do you know what they discovered? Many of their emails and passwords are now in the hands of criminals.
Imagine this for a second: You have worked and saved for years, and have finally found your dream home. Your loan is approved and you wire the money to the Title Company bank, which is becoming a common practice before closing. You think that everything is fine until you go to sign the final paperwork: they tell you that they don’t have your money. What happened to it? You were the victim of a real estate closing scam.
This scam often involves phishing and taking over the email address of the real estate agents, title attorneys, or the buyers – and it’s happening all too frequently. Now with phishing scams entering the world of real estate transactions, home buyers are losing millions of dollars. When the hackers create thee fraudulent email accounts or hack into a legitimate business accounts, they can then send a very official electronic communication asking consumers to wire money to a bank account. Instead of the account being legitimate, it in fact, does not belong to the tile company and is owned by the hacker. By the time the buyers realizes this, the money is long gone.
Unfortunately, this real estate closing scam is becoming all too common and it has likely happened to thousands of home buyers. It’s an unfortunate truth that the real estate industry is pretty lax on security. Though the greater financial industry has protection like encryption, the actual real estate industry is a mix of unprotected communication and free accounts. In addition, real estate agents and title professionals are often on the road, using public Wi-Fi to access their accounts and email. This is like an open door for hackers.
Help Prevent Real Estate Closing Scams
If you are in the market to buy a home, you want to make sure that you are taking steps to prevent these scams.
- Stop using e-mail to set up or finalize financial transactions. Instead pick up the phone and make a call to confirm the various transactions requesting to be made.
- Make sure that you have everything in writing – and double check all account numbers, routing numbers, and transaction amounts.
- Verify any transfer as soon as possible. If you think you have sent money to a scammer, call the bank immediately. They might be able to freeze the funds.
- Ask each of the parties involved to explain how they plan to keep your information secure. Don’t proceed unless you are satisfied with their answer.
Don’t just assume that your real estate transaction is being handled by someone who takes security seriously – there’s too much at stake. Buying a home, for most people, is one their largest financial transactions – if the money falls into the wrong hands, what would you do? At the very beginning of your home search, make sure that you insist on security over convenience. You may also want to consider signing up for a free trial of IdentityForce’s identity theft protection – that way, if your personal information is ever mishandled, you’ll know about it and have a chance to do something about it.
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