You might know how to protect yourself from a phishing scam, but does your real estate agent? If not, it could have disastrous consequences for you, your agent and your deposit.
While phishing scams aren’t new, the threat is growing in the real estate industry. Unsuspecting homebuyers are losing hundreds of thousands of dollars to these types of scams.
Here’s how it works:
A hacker breaks into your real estate agent’s email, or the servers of a title company, and begins tracking transactions.
Knowing the closing date, the hacker sends an email to you that looks like it came from your real estate agent or the title company.
The email contains wiring instructions that, if followed, place your funds straight into the fraudster’s bank account.
Once your funds are deposited into a criminal’s account, it’s virtually impossible to recover the money. All it takes is falling for one bogus email.
Below, we look at what you (and your real estate agent) should do to avoid getting hacked and what you should do if you receive a suspicious email from your real estate agent’s email address:
- One way that hackers get access to someone’s email account is by sending him or her an email with a link or attachment. If your real estate agent opens that link or attachment, that hacker has gained access to his or her email.
Therefore, both you and your real estate agent should avoid clicking on anything in an email that you weren’t expecting to receive.
If your real estate agent is using a free email service such as Yahoo or Gmail, two-factor authentication is essential.
Both you and your real estate agent should encrypt your email. Without email encryption, your messages can be intercepted and read by a hacker. Here’s how to encrypt your email and keep your conversations private.
It is an important best practice to change your passwords frequently and make them strong.
Red Flags and Next Steps
Call your real estate agent right away if you receive any wire instructions.
Be extra cautious as you get closer to the closing date. Because the scam involves hackers accessing your real estate agents email or a title company’s servers, he or she knows about and tracks transactions – then strikes when the moment is right.
Do not trust the phone number on any wire instructions. To verify instructions, call the number on your actual title company’s website.
The effects of this scam are devastating. The funds you have for a home could be lost in the blink of an eye. As a homebuyer, it’s important you stay up-to-date with knowledge of the latest scams—and it’s equally important your real estate agent does, too.