You’ve spent several years working and saving carefully, with the ultimate goal of purchasing your first home. Now that the time has come, you trust real estate professionals to guide you safely through this journey. But the fact remains that wire fraud is rampant in the industry, with scams increasing over 1,100% from 2015 to 2017.
Fraudsters like to target buyers in real estate transactions. Often they’re newbies, part of the 33% of homebuyers purchasing for the first time. Inexperienced buyers are particularly vulnerable, not knowing how the process works. For cybercriminals, real estate sales provide a constant flow of high-value transactions and potential targets.
To help you protect yourself from real estate wire fraud, we explain each vulnerability in the wire transfer process. Here’s what you and your fellow participants can do to increase security and close the door on cybercriminals.
The number of people involved
On average, there are eight parties involved in a real estate transaction. Along with the buyer and the seller, there are professionals such as the real estate agent, the underwriter, the lender, and others.
With so many participants, the communication chain can get complicated. Chances are, most of the participants will not have met each other in person, relying on digital communications to move the transaction forward.
Should a cyber perpetrator infiltrate this chain of communication, they can easily insert themselves into any part of the transaction. Once in that position, they can access critical information that will let them redirect the money to their bank account.
The time it takes to close
It takes about one and a half months to close on a house, but not all closings happen on the contract date. Issues with the appraisal, the title, unfinished repairs or final walk-through problems can all cause delays. Even missing information on your loan application can hamper closing.
Because it can take so long to close, cyber scammers have plenty of opportunities to strike. Once they’ve gained access to a participant’s account, they watch and wait for someone to send transaction information. Then, they create a fraudulent email claiming particulars have changed and substitute their own bank details instead.
Steps for wire fraud prevention
It may seem like you have no control over fraudsters trying to hijack your real estate transaction. Still, there are effective steps you can take that make it harder for cybercriminals to get their hands on your hard-earned money. The key element is when everyone involved works together to strengthen the chain of cybersecurity.
Limit public information about yourself
You may think it’s harmless to list your favorite bands and post your interests on your public social media profile. But that is exactly the type of information cyber perpetrators will use against you. When they zero in on a target (such as you), they scour the internet for any useful data and with it, create convincing emails you aren’t likely to question.
For instance, if you frequently check in at a golf course, fraudsters could send a fake email (with a link) asking you to confirm a tee time. The link will lead to a fake login page where any credentials you enter will be sent to the fraudster. They can then use these details to intercept emails about your purchase.
By locking down your personal data on the internet, you close off the information cyber scammers need to craft these fabricated emails.
Establish identities early on
As we’ve mentioned before, most real estate transactions involve several participants. Many of these individuals may never meet face-to-face, suggesting a level of trust. Fraudsters know this and will try to capitalize on this implied trust.
A good way to foil this exploitation is to verify everyone’s identities and information at the beginning of the transaction. Don’t leave it to the end when cyber perpetrators have had plenty of time to infiltrate your network. Having that vital data from the start makes it easier to identify suspicious activity in the course of the transaction.
If you use a real-time identity verification platform like CertifID from the beginning, it’s almost impossible for a transaction to go wrong. And should the unthinkable happen, our protection is guaranteed up to $1,000,000.
Use two-step authentication
Without two-step authentication, you’re leaving yourself vulnerable to attacks. All it takes is one successful phishing attempt to compromise your credentials.
When you turn on two-step authentication, a successful login will require an extra step. For example, besides entering your username and password, you’ll also receive a code on your phone that you will need to put in.
Assuming you haven’t lost your phone, two-step authentication can be a good line of defense. It will keep fraudsters out, even if they learn your login details.
Verify any changes to details
Once a cyber perpetrator has breached your email, they can claim to be any participant in the purchase. While it’s not uncommon for transaction details to change for wire transfers, you can never be too careful.
If you receive an email asking you to change the wire transfer details, proceed with extreme caution. You should get in touch with the person asking for the change, but not through email. Instead, meet them face-to-face, if possible.
If it’s not, then a call could be enough. But, this method of verification will be useless if the fraudster has thought ahead and put a vishing scam in place. If you can’t meet the participant in person, you should try to have a trusted individual do it for you.
Ensure your real estate transaction is secure so you can purchase your dream home without fear of wire fraud. Have your real estate agent request a demo from CertifID today.