Spring is the time of year when home buyers, sellers and real estate professionals are busy making deals. Unfortunately, crooks are also busy trying to get their hands on the money that is exchanged in these real estate deals.
Minnesota Commerce Commissioner Mike Rothman is warning home buyers and sellers, as well as real estate professionals, about a wire transfer scam that targets real estate closings.
The Commerce Department is currently investigating several Minnesota real estate transactions in which hundreds of thousands of dollars were diverted and stolen as a result of fraudulent wire transfer instructions received via fake emails.
“This scam has been spreading around the country and now it’s begun to hit Minnesotans,” said Rothman, whose agency regulates the real estate industry in the state. “Crooks are hacking into computers, getting private information about real estate transactions and using it to rip people off. We want to stop these thefts and make sure Minnesotans are on guard against fraud when they buy their dream homes.”
This is how the scam typically works:
To get information about upcoming real estate closings, crooks hack into the computers or email accounts of real estate professionals. This may be done by sending an email containing an attachment or link that, when opened, downloads malware that lets the crooks gain access to the computer or email account.
As a closing date approaches and arrangements are made to wire funds to the sellers, the scammers send a bogus email to the closing agent with a “last minute” change in instructions to send the money to a different account. The email, which purports to be from the seller’s title company, looks legitimate and often contains accurate details about the transaction.
Once the funds are unwittingly wired to the fraudulent account, the money is quickly withdrawn, never to be seen again. It is suspected that many of these criminals are operating from overseas, and the Commerce Department is working with other law enforcement agencies.
For a safe and successful real estate closing, the Commerce Department offers the following tips:
• Never send financial information via email, unless it is encrypted.
• Never wire money for a real estate transaction based only on an email.
• Confirm all money transfer instructions, preferably in person or through a trusted and independently-verified phone number. Don’t rely on a phone number or website address in an email.
• Be suspicious of any “last minute” changes in payment instructions.
• Do not open an attachment or link in an email unless you are absolutely sure who sent it to you. It may contain malware that allows a hacker access to your computer.
• Practice good computer protection. Regularly change your passwords and make sure your computer’s operating system, browser and security software are up-to-date.
For questions or concerns, contact the Commerce Department’s Consumer Services Center by email at [email protected] or by phone at 651-539-1600 or 800-657-3602.