Cyber-crime is an unfortunate reality for many large institutions and is also a potential threat in real estate transactions. Wiring funds directly to escrow is still viewed by the real estate industry as a better practice than having real estate agents physically transporting buyers’ deposit checks. However, recently there is a growing scheme in which buyers have received e-mails from their buyer agent, escrow officer or lender providing wire transfer information for use by the buyer to transmit earnest money or purchase money deposits to the escrow company. Hackers intercept these e-mails and then alter the wire transfer instruction and account information in the e-mails to re-direct the buyer’s funds to the hacker’s account or to the account of a victim of another scam. In recent reported cases, the “bad guys” even created phone numbers inserted in the email to verify that the wiring instructions were indeed valid. In reported instances, it was a buyer who was induced to misdirect their own funds; however these hacked e-mails could conceivably be used to cause sellers to be victims as well.
DO NOT EVER WIRE FUNDS PRIOR TO CALLING THE ESCROW OFFICER AT THE NUMBER PREVIOUSLY PROVIDED TO YOU and confirming verbal wire transfer instructions before taking steps to have the funds transferred. Never wire funds to an entity other than the Escrow Holder and never outside the State of California. It is critical that you obtain the phone number of the escrow officer at inception of the escrow and not use the phone number in the email with the wiring instructions. You are also encouraged to take appropriate, immediate steps to secure the computer systems that you use along with all e-mail accounts.
If there is any indication that you have received questionable wiring instructions, you should promptly notify your bank, your real estate agent and the escrowholder. There are many on-line sources that can provide useful information regarding this topic including, but not limited to, the following sites:
The Federal Bureau of Investigation @ www.fbi.gov
The National White Collar Crime Center @ www.nw3c.org
On Guard Online @ www.onguardonline.gov