The FBI has recently urged caution of wire fraud in various industries, including real estate. Property buyers frequently do not know the risks that dishonest activities of this type can introduce, how common real estate wire fraud is, and how it is typically carried out. Unfortunately for many victims, lost funds are frequently unrecoverable. Learning about the risks should be an essential part of any real estate buying experience.
How Does Real Estate Wire Fraud Work?
It turns out that email is typically the failure point in this kind of fraud. It works like this: a hacker gains access to a real estate professional’s email through a broken password. From there, the hacker is able to read all of the emails contained in the account. Posing as the professional whose account he or she controls, the fraudster will send a request of funds to the property buyer or another real estate professional. The unwitting email recipient wires the funds, and the fraudster disappears into the mist.
What Can A Real Estate Fraud Victim Do?
Larger real estate companies may have insurance that covers losses in the case of real estate fraud. However, smaller real estate firms may not have the same degree of insurance. Furthermore, if it is the buyer who mistakenly wires money to the fraudster, the buyer’s bank may not be able to cover or recover the funds.
Propy‘s transaction management platform is a modern solution that eliminates the need for hackable email accounts. All communications are secured by the blockchain and completed within the platform (not third parties).
Wire fraud is an unfortunate reality in many industries. Nationwide, wire fraud has cost Americans $26 billion since 2016. However, real estate professionals and buyers can protect themselves by taking the necessary steps to prevent getting hooked.