Wire Transfers with a New Twist
Before getting into the subject of wire transfers everyone involved in a Real Estate transaction should have a system to protect themselves from spam emails especially the dangerous links they contain. There should be a secret code used by Real Estate Agents and clients so the client knows if an email is legitimate. Especially if it contains links. Since 90% of Real Estate transactions are conducted online with forms send via email for review and electronic signing, the Agent should have a verification system in place.
The day a client enters into a Real Estate transaction where emails are exchanged, computers all over the world gain access to email communication where such emails are flagged by computer programs designed to identify those transactions and that information is sold all over the world. Scammers use sophisticated software to mimic legitimate emails. It takes a trained eye to notice a counterfeit email from the real thing. To protect against this the Real Estate Agent and client need a system to verify when an email is being sent along with information to verify the actual intent.
Real Estate closings involve funds. In most cases Buyers provide funds to close in the form of a Certified Check from their local bank. In some cases funds from the Buyer’s bank account are wire transferred to the Title Company. Scammers use that as a tactic to separate Buyers from their hard earned savings. To protect against those types of scams a system needs to be in place. The new Wisconsin Offer to Purchased added a warning about Wire Transfers:
WIRE FRAUD WARNING! Wire Fraud is a real and serious risk. Never trust wiring instructions sent via email. Funds wired to a fraudulent account are often impossible to recover.
Criminals are hacking emails and sending fake wiring instructions by impersonating a real estate agent, Firm, lender, title company, attorney or other source connected to your transaction. These communications are convincing and professional in appearance but are created to steal your money. The fake wiring instructions may even be mistakenly forwarded to you by a legitimate source.
DO NOT initiate ANY wire transfer until you confirm wiring instructions IN PERSON or by YOU calling a verified number of the entity involved in the transfer of funds. Never use contact
information provided by any suspicious communication.
Real estate agents and Firms ARE NOT responsible for the transmission, forwarding, or
verification of any wiring or money transfer instructions.
This new system replaces the old system. When using a Wire Transfer the Title Company would the Agent know the Wire Transfer request was being sent. The request would contain a bit of secret information to verify the fact the email was sent from a legitimate source. The timing along with that secret information would verify the authenticity of the email. Banks also identified information in the Wire Transfer instructions.
After review the State and attorneys working for Wisconsin Real Estate Agents decided to use a uniform system. They also determined, the least amount of people involved, the least amount of sensitive information is shared via email. Which left Real Estate Agents out of the Wire Transfer process.
The new system streamlines the Wire Transfer instructions and process between the Title Company receiving the funds and the Buyer responsible for sending the funds. The safe guard is a phone call from the Buyer who should have the phone number of the Title Company along with a contact name. Throughout the closing process information is collected by the Title Company that requires discussions with Buyers. Buyers should add the phone number of the Title Company to their phone list along with noting the name of their contact. When Wire Transfer instructions are sent via email, Buyers are to call the Title Company, talk to their contact and verify specific information in the instructions.
It is amazing how sophisticated scams have become. It is difficult to stay ahead of of scammers. It is important to look over Wire Transfer information as soon as possible, call to verify that information, and avoid sharing that information with any other sources.