A study shows that Los Angeles area homebuyers are losing five million dollars a month to cybercriminals. In a scheme which started in 2013, and which shows no signs of slowing down, buyers are tricked into sending their down payments into the pockets of cyberthieves.
The thieves, after hacking into the email accounts of real estate agents, escrow offices, or title companies, are posing as legitimate parties and giving clients last minute money-wiring instructions, diverting the money into another account. By the time the crime is detected, sometimes just hours later, the money can be gone for good. The average loss to a homeowner is about $130,000.
The modern-day real estate transaction, with so many parties involved and so much money at stake, is a growing target. Many times, there is a rush by homebuyers, realtors, brokers, mortgage lenders, and escrow companies to close on a home sales contract quickly and efficiently. In many instances, the homebuyer has never met all the players involved. Instead, all the parties exchange information via text message or email, rather than by telephone or in face-to-face discussions.
This creates a great opportunity for a hacker to monitor the emails and text messages flowing between the buyer and the various players, and at the appropriate moment, usually hours before closing is to occur, insert themselves in the conversation, posing as the realtor or escrow company. It is then a simple matter to direct an unsuspecting homebuyer to wire-transfer the money to a different account. The homeowner, unaware of the switch, sends the money and, in most cases, never sees it again. Josie Huang “Cyberscams are bleeding millions from LA homebuyers” www.scpr.org (Jul. 07, 2017).
* Hanover Insurance Group