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What is Wire Fraud and When Should You Be Concerned?

Imagine nearing your closing day. An email comes in from your Realtor. In it, you find directions for wiring your down payments and closing costs – a total of $25,000. Since you did not want to delay your closing date, you quickly wire the money as directed. However, the next morning you find out that the funds were never received and that email was a fake. It was sent by a scammer in a common fraud scheme targeting home buyers. Michele Harmon Team always keeps your best interests in mind and therefore, we want to help you catch wire fraud before it happens to you! In this week’s blog, we will explain exactly what wire fraud is, when you should be concerned, and what to do if you fall victim to it.

What is Wire Fraud in the Real Estate World?

Wire Fraud is a scam in which a hacker will pose as your Real Estate Agent and convince you to divert your closing costs to a fraudulent account. Wire Fraud relies on phishing. When phishing, a hacker will use fake emails, phone numbers, or websites to impersonate someone you trust. The scammer may use an email address or phone number that looks similar to the one your Realtor or lender uses and if the scammer was able to phish your personal information prior to contacting you, they may have some of your personal information that only someone you know and trust would have.

In addition to phishing, a scammer may also be familiar with spoofing. This allows them to appear more legitimate. Spoofing is when a scammer uses a special software to mimic your agent or lender’s phone number or email. When a scammer calls or emails from a spoofed account, it can look exactly like you are speaking with someone you trust.

The scammer’s goal of wire fraud is to get your closing costs into their own banking account. If you ever receive an email or call from someone telling you that there has been a last minute change in the closing cost procedures or if they tell you that they sent you the wrong address initially, remain cautious and confirm by calling another member of Michele Harmon Team.

How Can You Identify Wire Fraud and Prevent it?

Be Aware

It is important that you completely understand the closing process prior to payments being due to help prevent becoming a victim of wire fraud. Michele Harmon Team can speak with you in person or over the phone about how to complete the closing process. Keep in mind that wiring instructions are always sent by the title company. However, wiring instructions are typically only sent by a title company by your request. Do not initiate your wire transfer until you personally call the title company from a verified phone number to verify the wiring instruction data.  You may want to create a password for each party to use in order to confirm their identity while communicating. Avoid discussing the closing process through email to prevent phishers from using this information to later pose as someone you trust.

If you can remember anything from this blog, remember that as a buyer, you will never give a Real Estate Agent money. All money in a Real Estate transaction is made out to the title company. Money is never made out to the Agent.

Write Down All Contact Information

It is best to have at least two different contact methods for everyone involved in your closing, such as your lender, your Real Estate Agent, and any other professionals who may be involved. Write down each party’s name, phone number, email address, or any other contact information you may have. 

Proceed with Caution

Beware of any last-minute changes to the closing process. Confusion and panic typically cause people to go against their better judgement. Scammers use this to their advantage in order to convince you to wire money to their accounts. If you feel like you are being rushed to send money immediately, you may be communicating with a scammer. Remain wary of these type of messages, especially if the request was sent via email.

If this were to happen to you, do not follow up on emails with wiring instructions. When calling, only call the phone numbers you know will connect you with your Agent or lender. Do not use any phone numbers contained in the email. As stated earlier, scammers can spoof phone numbers and create fake phone numbers.

Also, keep in mind that email is not safe for transmitting financial information. Prevent phishers from accessing this information by never emailing your financial information, regardless of who you are sending it to. 

Although phone calls can be more reliable than emails, it is important that you remain wary of phone conversations. Because of spoofing, it can be difficult to determine whether a phone call is a scam or not. Always trust your gut. If something does not feel right at any time during a phone call, hang up the phone and contact Michele Harmon Team. We can help you confirm if a change was made to the closing process.

What to Do If You Believe You Were Scammed

Try not to panic, take a deep breath, and follow the steps below if you believe you have become a victim of wire fraud:

Contact Your Bank or Wire Transfer Company Immediately

If you are concerned that you may have sent money to a fraudulent person, call your bank or wire service immediately and request a wire recall. If you act quickly, you may have your money returned to you. Be sure to explain your concerns to help increase the likelihood of getting your money back.

File a Police Report and a Complaint with the FBI

File a Police Report to document what occurred. If the scammer tries to use your personal information to open a credit card or to take out a loan, there will be a record of this person previously trying to steal from you electronically. Nowadays, payday loans can be requested over the internet. If they have obtained a copy of your driver’s license and have valuable information such as your social security number, they can take out a loan in your name from the comfort of their home. After you file a police report, be sure to file a complaint with the FBI. The FBI has an internet crime division that may be able to help you. Simply contact the FBI’s Internet Crime Complaint Center and submit a report. Include as much information as possible in your report.

In Conclusion

Michele Harmon Team is aware that the biggest key to wire fraud prevention is education. We always keep your best interests in mind and we want you to remain protected throughout your transaction. If you ever have any questions or if you feel unsure about an email or phone call you received, please do not hesitate to contact us at 713-818-1330. We are always happy to help.

Visit the links below to learn more about wire fraud, phishing scams, and other attempts at fraud:

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