Wire Fraud Continues to Impact Real Estate Industry

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By Jennifer Felten 

Wire Fraud is unfortunately happening too often and sometimes with devastating results.  Everyone needs to become more aware and more vigilant against these criminals as everyone is at risk.  For example, Lori Sattler, an acting State Supreme Court justice in New York, was in the process of selling her Upper East Side apartment.  She received an email that she thought was sent to her by her real estate lawyer.  The email stated to wire $1,057,500 to a specific account.  It turns out the account she wired the money to was at Commerce Bank of China.  Yes, a State Supreme Court justice lost over one million dollars to wire fraud.

A Colorado couple found what they thought was their dream retirement home.  It was close to their son and had plenty of space for the grandchildren to play and visit.  However, within 24 hours of the transaction closing, they discovered they lost their entire life savings, over $272,000.  They were also victims to wire fraud.  They are currently in the process of suing the bank, escrow company, realtor company, and the realtor personally.  The couple states that none of these professional companies did enough to safe guard their personal information because they transmitted data without using secure means.

These two examples illustrate just how costly and devastating wire fraud can be.  There are many things people can do to protect themselves, and their clients if they are a real estate professional.  There are no 100% guarantees that you won’t fall victim to wiring fraud, but being vigilant and careful can help reduce the chances that you too will fall prey.  Here are some recommendations for minimizing you and your client’s risks in this area:         

  • Minimize Emailing Data
  • Only Use Secure Email for Non-Public Personal Information and Financial Data
  • Use a Secure Server
  • Get Contact Info for Consumers Up Front
  • Ask Consumers Questions When They Call to Verify Their Identity
  • Verify Email Address on All Communications
  • Refuse to Provide Wiring Info Without Speaking to Consumers
  • Warn Consumers of Risk of Fraud in Writing and Orally
  • Require Notarized Wiring Instructions
  • Do Not Accept Changed Wiring Instructions
  • Setup A Code Word with Consumers
  • Text Code to Consumer’s Cell to and Require that Info Before Wiring
  • Beware of Unusual Circumstances, Foreign Seller, Non-Technical Parties
  • Don’t Fail to Follow Your Own Procedures
  • Notify Your Bank if There is an Attempt on You or One of Your Clients so the Account can be Flagged

Following these procedures will not guarantee that funds will not be lost, but they will make it much harder for you and your clients to be fooled by scammers into sending money to the wrong place.


Jennifer Felten

Jennifer Felten, Esq., Relaw Ms. Felten specializes in representing both individuals and legal entities, providing representation and guidance on a variety of real estate related matters.  Relaw APC 699 Hampshire Road, Suite 105 Westlake Village, CA  91361 US Phone: (805) 265-1031 or email her at: jennifer@relawapc.com 

 

Upcoming Speaking Engagements

For July 2017, Jennifer has the following speaking engagements:

Ventura County Escrow Association – Wednesday, July 12, 2017

California Escrow Association Northern California Educational Conference – Friday, July 21, 2017

West End Real Estate Professionals – Friday, July 28, 2017

 

 

For inquiries or questions about having Ms. Felten speak to your organization please email info@relawapc.com.


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