SALT LAKE CITY — Local advocates are cautioning Utah consumers to be wary of a re-emerging fraud scheme that is making its way across the country.
The Utah Division of Real Estate is warning Utah consumers to be aware of a scam that targets property transactions through fake emails in an effort to trick people into wiring loan transfers and other high dollar amounts to fraudulent accounts. The scam has been around since 2012, but it has recently resurfaced in some states, according to the Federal Trade Commission.
“Similar to IRS scams, these real estate scams may travel state-to-state seeking new victims,” said Francine Giani, executive director of the Utah Department of Commerce. “Please carefully review any email messages regarding your property transaction, and if there is any doubt, contact your real estate agent or mortgage broker to verify before releasing any information or funds.”
Thus far, no cases have been reported in Utah, though the National Association of Realtors has issued alerts regarding the wire scam that has resulted in practitioners and consumers losing earnest money, closing costs, down payments and — in some cases — loan proceeds.
“All parties in a real estate transaction should be wary of email communication, especially if last-minute changes are requested, “ said Jonathan Stewart, director of the Utah Division of Real Estate. “If criminals have access to your email account, they can make anything sound legitimate.”
Authorities said the scam begins with a con artist gaining access to an email account through hacking or a phishing scheme. Once they have gained access, the fraudsters monitor email messages regarding pending real estate transactions until a deal is about to close. Then typically within 24 hours of closing, the scammers use the email account to send new wiring instructions to the buyer, seller, escrow agent, lender, real estate agent or broker.
The new orders frequently direct the money into a foreign bank account outside of the country. By the time the scam is recognized, the money has already been withdrawn from the fraudulent account and there is no way to accurately locate the criminal, Stewart said.
Tips for real estate consumers
1. Be wary of last-minute emails with changes to the transaction.
2. Contact email senders by telephone using a phone number you have independently verified.
3. Never send wire transfer or other sensitive information via email.
Tips for real estate professionals
1. Inform clients about your email and communication practices and alert them to the possibility of fraudulent activity.
2. Prior to wiring any funds, contact the intended recipient through a verified telephone number and confirm the wiring information is accurate.
3. If a situation arises in which there is no choice but to send transaction information via email, make sure to use encrypted email.