What is a Wire Fraud?

Wire fraud is a serious issue in the real estate industry. In 2020, there were over 13,000 reported cases of wire fraud in the United States, and the total amount of money lost was over $ 213 million. Wire fraud is a type of fraud that involves the use of electronic communications to commit a crime. Examples of these electronic communications are text, email, social media, and phone calls. In the realm of real estate, wire fraud can take many forms, but the general idea is that someone uses false information to convince a buyer or seller to send them money. Wire fraud occurs when a buyer or seller is tricked into sending money to a fraudulent account. For example, a scammer might pose as a real estate agent and send forged documents to a potential buyer in an effort to persuade them to wire money for a down payment. Or, a scammer might impersonate a title company representative and send false wiring instructions to a seller in an attempt to steal the proceeds from the sale. Thankfully, there are ways that both buyers and sellers can take to protect themselves from wire fraud. 

For buyers, it is important to verify wiring instructions with the title company or real estate agent before sending any money. It is also a good idea to use a secure form of payment, such as a wire transfer from a bank account that has been verified with the title company or real estate agent. For sellers, it is important to be aware of wire fraud schemes and to educate buyers about the risks. It is also a good idea to have a policy in place for accepting payments so that wire fraud cannot occur. By taking these simple precautions, you can ensure that your real estate transaction is not jeopardized by wire fraud. If you have any questions or concerns about a potential wire fraud scheme, please contact your local authorities.