Cyber Crime in Real Estate

Be aware that cybercrime and theft is very real in the world of real estate.  It is happening in Helena, as recent as June 2018.

An example of an incident that occurred in Helena, a buyer received a last minute email with a change of closing instructions to wire money to a different account.  It turned out that this was a fraudulent offshore account. The closing was to occur the next day. Authorities have been engaged and hopefully the fraudulent transaction will be stopped and the money recovered.

Please review the article below and be vigilant in protecting your clients and yourselves by observing the 7 recommendations. I have also attached the FBI’s Financial Fraud Kill Chain should you ever need the information.

FBI Warns Homebuyers of Growing Threat
Reports show over 500% increase in real estate internet crime from 2016 to 2017

Cybercrime often brings to mind the image of a hacker huddled over a computer in a dark room, breaching the security of huge companies like Equifax, or even the IRS.  But one of the fastest growing categories of internet crime, the FBI warns, involves real estate transactions. 

According to data provided by the FBI, in fiscal year 2017, almost $1 billion was “diverted or attempted to be diverted” from real estate purchase transactions and wired to “criminally controlled” accounts. That figure is up explosively from 2016, when the FBI counted $19 million in wire-transfer frauds affecting home buyers.

Hackers are gaining access to e-mail accounts through captured passwords, and they search inboxes for messages related to real estate transactions. Once they find a victim, they’ll send a spoof e-mail that looks like it’s from their agent, title representative, or attorney, and it can say there are “new” wiring instructions, which includes a fraudulent account. The home buyer will then unwittingly wire funds directly into the hacker’s account, the criminals then withdraw the money and vanish.

Forget about anonymous emails promising sweepstakes wins or pleas from Nigerian princes looking to get millions out of their country. These are custom-tailored and well researched messages aimed at stealing down payments. This is phishing with an IQ.

Although cyberthefts involving home settlements have been occurring for several years, the number of attacks and the dollar amounts stolen during the past year are stunning real estate industry experts, who expected that greater public awareness of the problem — and efforts by title and realty firms to better secure their systems — would thwart the hackers. 

So, what does this surge in real estate wire fraud mean to you? Homeowners looking to buy can do several things to protect themselves including:

  1. Know when you could be targeted and be suspicious and alert as the most vulnerable time is right before a transaction closes and homebuyers prepare to send a wire transfer;
  2. Be wary of wire transfer emails that change the instructions at the last minute or ask you to click a link or enter a password;
  3. Scan the email for typos or other small inconsistencies–including the email address sending the instructions;
  4. Always verify the wire transfer information you received in the email by phone or in person;
  5. Consider using a cashier’s check instead of a wire transfer; and change your password regularly;
  6. Never “Reply All,” forward emails only to your intended recipient; and
  7. Avoid emailing about wiring instructions on an unsecured network, like that at a local coffee shop.

If you are a victim, don’t wait to report it. The FBI says that it may be able to stop the transfer and recover consumers’ funds if the wire transfer amount is $50,000 or more, the bank transfer is sent internationally, the bank issues a recall notice and the FBI is informed of the details within 72 hours.


FBI Fraudulent Kill Chain (pdf)