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Watch out for wire fraud in real estate transactions

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The New York Times recently reported that wire fraud has been on the rise in real estate transactions, especially with the rise of rapid-fire negotiations conducted online and via email. Victims of wire fraud have received detailed emails with instructions for wiring down payments and other large sums of money from accounts that appear to be their attorneys, but in fact originate from hackers. According to the Times, the essence of the scam involves hacking into the emails of attorneys and simply monitoring the progress of negotiations. Then, when the prospective buyer is on standby to make payment, the hacker directs an email to the buyer’s account while posing as the relevant party that awaits payment. [1]

Over the last five years, the FBI has documented nearly 4000 instances of real estate wire fraud scams, with losses of approximately $340 million. The first ten months of 2019 alone accounted for nearly 800 of the scams and $70 million in losses. If money ends up wired offshore it can become nearly impossible to retrieve the stolen sum, and scammers have also targeted payments that are made right before banks close for holidays or weekends. With a one or two-day window for the scammer to continue moving funds, the victim of the fraud stands almost no chance of recovering the money. Experts recommend using a virtual private network, or VPN, to create an added layer of security for online activity. Most importantly, be sure to call ahead of making a major payment to confirm the other party has indeed sent you a request. Even though transactions increasingly take place in cyberspace, a little of the human touch can go a long way in avoiding a pernicious form of fraud.

[1] Biggs, C. (January 2020) How to Protect Yourself From Real Estate Scams from the New York Times https://www.nytimes.com/2020/01/03/realestate/how-to-protect-yourself-from-real-estate-scams.html Accessed January 7 2020

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