EMTAR Fraud Alert Bulletin

By Morgan O’Neill, Birthright Title
An EMTAR GOLD Affiliate Partner

Being in real estate, we are subject to all different types of fraud, wire fraud and seller fraud being the two most prevalent. It is important as professionals that we know how to spot suspicious activity and deal with it in an effective and timely manner.

Wire fraud can happen at any point during the transaction. When a buyer is sending earnest money, sending their funds to close, or a hacker manipulates the seller’s wiring instructions—those are just some examples of “money muling.” It is important that wiring instructions are not emailed, unless sent in a secure email and directly from the receiver. All instructions should be verified by calling the published phone number of the receiver.

Billions, yes billions, of dollars have been lost due to a party’s email being hacked and instructions being changed. Once the funds are sent to a fraudulent account, there is a less than a 29 percent chance that the money will be recovered. Take the steps to educate your clients on the potential for this type of fraud.

Another type of fraud we are seeing more is seller fraud, and it starts with listing a property. The fraudulent seller is contacting an agent to list their property. Most of the time the “seller” is out of state or can only text and email. Usually, the property they are asking to be listed and sold is vacant, unimproved land, or rental property and free and clear of any liens.

There have been a few instances where the transaction has gone all the way to the closing table before the title company caught the fraud by noticing the driver’s license was fake or altered. As REALTORS®, you have a duty to verify the potential sellers of a property. Ask questions, get two forms of ID, anything to help you verify that the person on the other end of the phone is, in fact, the owner of the subject property.

“When did you purchase the property?”
“Who did you purchase it from?”
“What title company did you close with?”
“Who was your agent when you purchased?”

Those are all valid questions you can ask to verify identity. If you start this process up front and explain to the customer you are protecting their property and their rights, the entire transaction will go more smoothly.

Title companies around the state are implementing policies and procedures to combat fraud, but they can only be effective with your help. Talk to your title company about what they are doing to verify sellers and protect your client’s money. Join in and stay vigilant.

A successful transaction means us all working together to fight the fraudsters!