There is a new form in town and things are fixin’ to change. I hope. The name of this new form is “Wire Fraud Alert Disclosure.” It is with open arms and warm embraces that we welcome this form into the real estate industry. This form is required for all professional Realtors to send out to both buyers and sellers to read through and acknowledge. However, in the very rare case that the phenomenal number of documents that are pushed out to sign in the event of a real estate transaction are not thoroughly read through line by line and understood, I thought it could be helpful to review it here minus the pursuant tos, whereases, hereins, and albeits.
Unfortunately, every time the housing market heats up, there will be people who would rather spend their time, talents and exorbitant efforts figuring out a way to swindle people rather than make an honest living. It requires the same amount of work, brainpower, and resources either way, so I’m not quite sure why anyone would choose the “easier” way rather than the other. The truth is, spoiler alert here, it probably isn’t any “easier” at all.
Either way, it’s happening; hence the new form. Exactly what is happening, is the question. The usual path these scammers take is through email. They find out who is closing on a real estate transaction and email new wiring instructions to the buyer or seller or even the Realtor, escrow officer or lender. The email contains wire instructions to have funds directed to a bank account outside of the U.S. The money goes directly into the scammer’s account. Once it is gone … it is gone for good.
This scam has become so prevalent because the financial transactions that occur between title companies, lenders and even, at times, real estate brokerages with earnest money, occur through wire transfers. Wire transfers are legitimate, necessary and valid in a real estate transaction. Yet, according to the director of the Utah Division of Real Estate, just last year alone, consumers nationwide lost $149 million, including $20 million in Utah alone to this scam. This new form alerts all parties to this type of fraud. It warns, in bold, underlined writing, to “Never trust wiring instructions sent via email.” That is really the equivalent of 10 exclamation points or a shouted warning. The form continues to advise all parties to confirm wiring instructions personally by calling the escrow officer/lender/Realtor directly. Calling all three to verify isn’t really a bad idea either.
Other items that are addressed include personal information such as Social Security numbers, bank account numbers as well as credit card information. Legitimate lenders and title companies will always use secured or encrypted emails. One way to verify a secure website is to be sure the URL at the beginning of the website starts with https (the “s” stands for secure).
Always, always, always (repeating something three times is just as powerful as underlining and typing in bold — refer to “The World According To Jen”), refrain from clicking on links or attachments from unfamiliar sources. This could contain spyware that would allow a hacker to access all your online information. It could also download a nasty virus onto your computer, which is just as bad, if not worse, than catching a nasty virus yourself. Also, just for the record, 1234 is not a secure password.
Just because there is a new form in town doesn’t mean you don’t need to arm yourself. Read the new required form. It’s actually a pretty good read. I give it all five stars.