The FBI has recently issued a new warning to all potential homebuyers of sophisticated phishing attacks deliberately targeting the mortgage industry.
There is a clear new pattern of crime now: scammers stealing serious money by posing as real estate agents or title companies and providing seemingly secure transactions.
Reports of these frauds have gone up by 480 percent nationwide, clearly indicating that many Americans are falling victims to foul play.
Targeted parties stand to lose their life savings and in most cases, affected people never retrieve their money again.
So far, these frauds have already added up to millions in lost money.
Often the money is wired overseas.
The cyber criminals target susceptible homebuyers, closely monitoring their purchase decisions, and hone in on victims at crucial moments of vulnerability, for example, right before the final payments, thereby coming across as legitimate.
Usually the initial access is acquired by hacking the email accounts of the brokerage or title companies.
Messages of their clients are intercepted, and then fraudulent emails designed to look authentic are sent to homebuyers about wiring payments to an account belonging to the scammer.
Victims unknowingly send wire transfers to faceless scammers believing they are send it to their trusted brokerage firm.
This particular cybercrime tactic is not new
A year ago, the Federal Trade Commission and the National Association of Realtors warned homebuyers about hackers sending fraud emails claiming “last minute changes” to the wiring instructions, and telling the buyer to wire closing costs to a different account—the closing cost phishing scheme.
What seems new is the rise in the crime rate.
Both NAR and FTC strongly recommends reporting any phishing attack to the FTC.
In order to be safe, FTC suggests never sending financial information via email as it is not secure. Additionally, homebuyers are encouraged to go to websites of financial institutions and brokerage firms directly or go via email instead of through an email-embedded link.
The “https” in the URL, where “s” stands for secure is also a good indication about authentication.
Downloading email attachments or clicking on links is always risky. Before any major wire transfer, making phone contacts with the brokerage or mortgage firm is always the best way to go about it, FTC officials remind homeowners.
Want more to be done
The American Land Title Association (ALTA) has criticized FTC’s warnings as falling short of its intended consequences. They demand more action, visibility and concrete steps from other agencies like the Consumer Financial Protection Bureau.
“Despite efforts by the title industry and others to educate consumers about the risk, homebuyers continue to be targeted,” Michelle Korsmo, ALTA’s chief executive officer, said.
“With the spring homebuying season underway, it’s vital to continue raising awareness about these schemes,” Korsmo added.