Hot Topics in Cyber Fraud Risk Reduction

by Katie Johnson, SVP & General Counsel
May 2016

a. Background: Criminals are currently hacking into email accounts and using information in
those accounts to dupe home buyers into a fraudulent wire transfer. These hackers send
home buyers an email that is spoofed to look like it comes from the real estate agent, title
representative, or attorney involved in the transaction. The email is sent right before closing
and claims that there has been a last minute change to the wiring instructions. Following these
new instructions, the home buyer will wire funds directly to the hacker’s account.

b. Risk Reduction Tips:

i. Alert home buyers of this fraudulent scheme. Many brokers are requiring signed
disclosure statements to that effect.
ii. Avoid sending wire instructions (and any sensitive financial information) via email.
iii. Instruct home buyers to call wire recipient immediately prior to sending, using an
independently-verified phone number.
iv. Use strong email passwords and change them regularly.
v. Contact law enforcement immediately if fraud is suspected.

c. NAR Resources:

i. Wire Fraud Alert
ii. FTC: NAR Warning
iii. NAR Window to the Law on Cyberscams