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Court finds agent 85% liable in settlement wire-fraud scam

Posted by Editor on August 1, 2018
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A Kansas federal court upheld a jury verdict that determined that a buyer’s representative was 85% responsible for the buyer’s losses from a wire-fraud scam. In the case, the buyer transferred purchase money to a scammer’s account because the buyer’s agent allegedly forwarded an email to the buyer containing false wiring instructions.

In existing wire-fraud cases within real estate, a criminal ordinarily steals an agent or title company’s password and accesses their email account. They often observe the transaction as it progresses. Once they know the closing date, they then send an email from that trusted account telling the buyer to wire closing money to the scammer’s account.

As a result, many real estate pros now tell their buyers to pick up the phone and call to confirm that the wiring instructions they’ve received are legitimate.

In the Kansas case, the scammer apparently took an additional step and created new email addresses for people involved in the transaction – addresses that looked almost identical to the original ones. In a flurry of back-and-forth email conversations, it can be easy for an agent to miss the fact that they’re writing to JohnRemingten@gmail.com” instead of “JohnRemington@gmail.com.”

A fake email address can allow a scammer to not only read messages between parties but also filter them, making it an effective way to insert fake wire-fraud instructions.

The court case highlights the importance of verifying wiring instructions – including account numbers – with an actual person at the recipient’s place of business.

An overview of the case is available on NAR’s website, along with the ruling issued by the United States District Court.

© 2018 Florida Realtors®




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