How to Protect Against Real Estate Wire Fraud

Buying a home is an exciting milestone and major investment for you and your family. You can keep your investment safe by being mindful that real estate transactions are sometimes targeted by scammers attempting to perpetrate wire fraud. Annual losses from wire fraud amounted to $446.1 million in 2022, according to the most recent statistics available from the FBI’s Internet Crime Complaint Center (IC3). The best way to reduce your risk is to work with professionals, including a REALTOR®, a member of the National Association of REALTORS®.

What is wire fraud?

Wire fraud is a scam using electronic communications to divert money to the bank accounts of cybercriminals.

How does real estate wire fraud work?

Cybercriminals target the participants in a real estate transaction, including buyers, sellers, real estate attorneys, title companies, and real estate brokers and agents. These scammers hack into email accounts, monitor the progress of the transaction, and wait for just the right moment when the transfer of funds is necessary for the closing. Then, they send the buyer an email with a change in payment type (from check to wire transfer) or a change from one bank account to the cybercriminal’s account. These sophisticated fraudulent emails mimic the real person’s identity using company logos and email addresses that are very close but off by a letter or number.

Why are scammers targeting real estate transactions?

A home sale is a large financial transaction that involves a mountain of paperwork—today usually handled electronically—and conducted by buyers who are sometimes unfamiliar with the process. Scammers prey on buyers’ excitement and confusion. Read more here.