A scam targeting homeowners is leaving some without the downpayment for their closing on the day the loan is to be signed.
CNBC highlighted two victims who lost six-figure sums in what is known as a business email compromise scam, with one losing the home that was to be purchased. Ryan Kalember, senior vice president of cybersecurity strategy at Proofpoint, told CNBC that it is a growing scam. His company tracks scammers over email and he said this type of crime has increased to a level that is 14 times higher than a year ago. What’s more, CNBC reported the Federal Bureau of Investigation has also warned multiple times in 2018 that email compromise scams are increasing, including real estate fraud.
According to CNBC, the scam works like this: a person who is involved in the home sale transaction, such as a real estate agent or attorney, gets his or her email account hacked via malware which is sent through email. The real estate professional doesn’t know the bad guy can monitor the real estate professional’s email for upcoming deals and as the closing date draws near uses the email account to send a message to the buyer directing them to wire the downpayment to account. The buyer thinks he or she is wiring the money to the seller but is in reality a bank account of the criminal who typically resides overseas. Criminals even follow up with phone calls reassuring the buyer the money is with the seller’s attorney, noted the report.
“The technical skill level is near zero for this crime, but the operational sophistication is very high,” Kalember told CNBC. “That means that the phishing kits and other technical tools are freely available on the internet, but they are investing more time and effort into taking steps to trick the consumer.” Citing data from the FBI, CNBC reported that between December 2016 and May 2018, businesses and consumers reported a 136 percent jump in losses due to this sort of crime.