Media Contact: Eric Berman - 781-839-5507 - eberman@marealtor.com

Don’t Get Scammed!

by The MAR Legal Department | May 03, 2017
The MAR legal department continues to hear about scams that Realtors® should be aware of. The most common scam currently affecting the real estate industry is known as the “Business E-mail Compromise” or “BEC.” Below, please find information on this scam:
The scam: A buyer in a transaction will receive an email from a real estate agent, title
company, or attorney with wiring instructions to transfer money for the upcoming
transaction. The email appears genuine and contains the company’s email information
and logo, and sometimes will include manipulative language to encourage you to act quickly. However the email is not from the so-called  sender; but rather, it is from a hacker who had monitored the email account of one of the parties then altered information in the email to have the funds sent to the hacker’s own account. Once the buyer transfers the funds pursuant to the wiring instructions included in the email, the funds are placed into the hacker’s account, most likely never to be recovered.

Who the scam targets: Anyone conducting business through email is a target. The Internet Crime Complaint Center (IC3) has seen dramatic increase in identified victims and exposed loss since January 2015. This scam was reported in all 50 states and in 79 countries. Fraudulent transfers were sent to 72 countries; however, the majority went to banks in China and Hong Kong. Over 8,000 victim complaints totaling almost $800 million were reported to the IC3 from October 2013 to August 2015.

What MAR is doing to protect its members: The Massachusetts Association of Realtors®, together with Local Associations of Realtors® and the FBI Boston Field Office, are working to increase awareness of these scams and educate Realtors® and others involved in the closing process on ways to avoid and report the scam. To
accomplish this goal, the FBI has created a guide that can be accessed by visiting The MAR Report.com and reading the Protect Yourself from Cyber Crime post. The flyer contains common variations of the scam, suggestions for protecting yourself, and, most importantly, how and when to report the matter to the BFO-FBI. It is encouraged that Realtors® print, e-mail, and share this document with co-workers and clients so everyone is prepared to react should the need arise.

What you can do to protect yourself:
  • From the very start of any transaction, communicate and educate. Get all parties involved in the transaction up to speed on fraudulent “red flags,” and make sure everyone implements secure email practices.
  • Verify wire transfer requests and changes to vendor bank accounts with two-factor authentication such as a secondary sign-off and/or using voice verification over known phone numbers. Never transfer money without this authentication. 
  • If any party in the transaction has received suspicious or questionable wiring instructions, all parties should be notified immediately. 
  • Encourage your clients to secure their computer systems and email accounts.
  • Carefully review your E&O Policy to see if your policy covers cybercrime. 
To protect you and your clients, educate yourself about the fraud schemes and be on
guard for any warning signs in a transaction. Realtors® and their clients who encounter these or similar situations are encouraged immediately report the incident to the FBI’s Boston office at 617-742-5533 and the IC3 at www.ic3.gov. You should also take caution and contact the Massachusetts Attorney General’s office at www.mass.gov/ago or the Federal Financial Fraud Task Force at www.stopfraud.gov. Finally, if you hear of any additional scams, please do not hesitate to report them to your Local Association
and/or the MAR Legal Department.