Along with retailers and financial firms, you can add real estate agents to the growing list of businesses battling cybercrime. Real estate sales firms and title companies are scrambling to put up defenses against internet scammers and overseas crooks who are trying to steal funds from homebuyers. "It's a reality, not just a potential, and it is happening pretty frequently," said Becky Connatser of Dallas residential sales firm Dave Perry-Miller & Associates. "The ramifications are huge for the seller, the buyer and the real estate company." Usually what happens is that a homebuyer gets an email from what appears to be the real estate agent or a title company requesting a transfer of funds for escrow or the down payment. The email appears to be coming from the company handling the transaction, the agent or title insurance officer.
"One person we heard about doing this was slick — he knew the terms about closing and said all the right words," said Mary Frances Burleson, CEO of Dallas' Ebby Halliday Realtors. Fortunately, the homebuyer checked with the agent before sending any money. But Burleson said in one case last year, a homebuyer was instructed to wire the down payment to an out-of-state bank and did so before the fraud was revealed. "Thank goodness most people call first, but that didn't happen in this case," Burleson said. "We are instructing all of our agents to warn clients not to fall for this." Ebby Halliday Realtors has held classes with all of its 1,800 North Texas agents and put tougher security in place for its email systems.
Agents and title firms suspect that cybercrooks are hacking into their email systems to get information and send messages to buyers that look like the real thing. "It's a national problem, not just in our area," Burleson said. "The internet was supposed to make buying a house easier. This is a real threat."
Working with the FTC
The National Association of Realtors is working with the Federal Trade Commission to give consumers tips on how to avoid getting scammed. "Buying a home should be an exciting event, but sadly an email and money-wiring scam is underway targeting consumers' sensitive financial information," Realtors president Tom Salomone said in a statement. "Buyers should be wary of sending financial information over email, downloading attachments, or responding to email requests to wire money in a real estate transaction."
Jim Fite, president of Century 21 Judge Fite Co. Realtors, said his firm is raising a red flag with its customers. "We definitely have been communicating that anytime someone is asking for a funds transfer to call and talk to us, don't just do it," Fite said. Consumers who have fallen for the scams — even if they haven't lost money — are reluctant to talk about it. "Nobody wants to admit they were a target and they had their email account hacked," said Lydia Player of Premier Title Co. "These hackers are making hundreds of thousands of dollars doing this. "They get into their accounts and shadow them until the closing."
Player said it's becoming widespread and isn't likely to stop before other consumers suffer losses. "We are telling our clients not to wire funds to anyone unless they talk to us first." Bill Head of the MetroTex Association of Realtors said his organization, which covers the D-FW area, is ramping up a cybersecurity program for its members. "Our president did a video last week that we are sending out," Head said. "We have to make sure everybody is aware of the dangers.
"It's unfortunate that it's gotten to this point."
Head said homebuyers who are transferring large sums of money are particularly vulnerable and could lose more than just a down payment or escrow payment. "The customer doesn't have tens of thousands of dollars lying around if they lose those funds, and the home sale winds up dead in the water," he said. Connaster said her firm has taken out insurance to protect it from claims resulting from cyberfraud. "We have a separate insurance policy just for cybersecurity," she said. "We've been lucky that some of it has been caught first. "We have told our agents to make sure your buyer understands if they are wiring funds and get something in an email, you call our agent and let them verify before you send any money."
- Dallas Morning News, August 4, 2016