Protecting Clients from Fraud Protects You Too.

You must tell your clients very explicitly to NEVER wire funds without speaking directly to you at the phone number they routinely call you on.  We know that more buyers are using wires (especially after COVID) but fraud is rampant and you must be making your clients aware to ensure they are only getting legitimate information on money transfers.  Including a long line of text on your email really isn’t enough. A verbal – and in some cases written disclosure – helps ensure your clients pay attention to this critical issue. The numbers are startling… In 2019 alone, $221 million was lost to fraudulent wire fraud transfers. From 2016 until now, however, over $26 BILLION DOLLARS was lost to wire fraud. Remember in 2018, we reported to you that a Kansas federal court upholds jury verdict that determined that the buyer’s agent was 85% responsible for the buyer’s losses, which occurred when the buyer transferred purchase money to fake account after buyer’s representative allegedly forwarded email containing false wiring instructions to the buyer. (link to past article) NAR has offered some specific guidance:

Recommended Practices:

  1. Educate buyers about possible scams. Many brokers are requiring a signed disclosure to acknowledge the risk of wire fraud.
  2. Include a wire fraud notice in your email signature.
  3. Use a transaction management platform or secure email to communicate with clients.
  4. Never send wire instructions (or any personal or financial information) via e-mail.
  5. Verify wire instructions with a phone number independently obtained.
  6. Use smart email practices:
    • Double check the sender’s email addresses and call the sender if you’re unsure they actually sent the email.
      (note that looks a heck of a lot like, right?! Did you note the little difference?
    • Monitor your email account for unrecognized activity.
    • Keep your operating system and antivirus programs updated.
    • Avoid using unsecured (public) WiFi.
    • Never click suspicious attachments.
    • Use strong passwords for your email and all online accounts, and two factor authentication when available. A strong password generally has these characteristics:
    • At least 8 characters
    • A mix of letters and numbers;
    • A mix of uppercase and lowercase letters;
    • At least one special symbol (i.e., ! @ # $).

NAR encourages all real estate licensees to know the signs of potential wire fraud and to educate their clients about these scams. Licensees should be knowledgeable about how to advise their clients if they believe they have been victimized by a wire fraud scam, and use best practices like these.

If fraud occurs, advise your clients:

  1. Time is of the essence.
  2. Immediately contact their bank to issue a recall notice of the wire transfer.
  3. File a complaint with the FBI at ICgov (link is external). Filing within 24 hours, but no more than 72 hours, provides the best chance of recovery.
  4. Contact your local FBI office(link is external).