Beware Wire Fraud Scam

Frausters Targeting Agents in the Memphis Area

 Fraud Protection, Safety & Scam Alerts

Published Tuesday, June 4, 2019

A Warning Sign with an Exclamation Point in Front of a Clear Blue Sky

Cybercrime remains an issue in today's digital landscape. Clients are receiving fraudulent wiring instructions via email across the country. The Association has received word of two instances of wire fraud in recent weeks.

An agent reported that their client was very nearly the victim of a wire fraud scam. The client received an email from the closing attorney sent from an official-looking email address with company disclaimers and the closer's name and information. Furthermore, the agent appeared to be copied on the email. The email instructed the client to send the wire to avoid additional costs; wiring instructions were attached along with a routing number, an account number and an amount.

Fortunately, the client called the agent before sending the transfer. As they were not scheduled to close for another week, the agent because suspicious. The agent was able to ascertain that both the attorney's email address and the agent's email address were altered on the original email. The agent reported the fraud attempt to the bank listed in the wiring instructions, the lender, the closing attorney and the relevant IT departments.

While the scheme was discovered in time to prevent fraud in that case, another client was not so lucky. An agent reported to MAAR that the same scheme was used on them and their client lost $15,000 in the transaction.

Please remember to be cautious during your real estate transactions and do your best to educate clients about wire fraud. Never trust wiring instructions sent via email. Cybercriminals commonly hack email accounts and send emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct.

This past December, NAR released a short Window to the Law video detailing the wire fraud scheme used in the above instances. It also advises members on how to avoid wire fraud in transactions. It is worth watching to learn to detect and avoid wire fraud or as a refresher for those who are familiar with it. A short slide presentation with NAR resources is also available online.

Last year, Tennessee REALTORS®' Residential Forms Committee created a Wire Fraud Warning form (RF308) meant to bring attention to consumers and to protect REALTORS® from liability. Members are urged to use this document in all transactions. To find the form, visit Tennessee REALTORS® Forms on the Fly and search for "RF308" (login required).

Later this month on Jun. 26, MAAR is offering The Rise of Cyber Crimes: Protecting Your Client and Yourself as a continuing education course. The course is worth two (2) hours of CE. Wire fraud will be covered, as well as tools and practices to protect against it.

Remember to exercise caution and report any suspicious behavior to MAAR and to the police.