Aug 18, 2017
Joe Crutchfield, CEO of Investors Title Company, shares with us his expert knowledge on how cybercrime has become a serious threat to the real estate industry, and how both agents and clients are falling victim to this scam.
GM: Can you explain what has been happening with recent cybercrime in the real estate industry?
Joe: Cyber hackers have been obtaining control of a real estate agent’s email account or computer, or perhaps the computer and email address of a buyer or seller. Once obtaining the account, they have access to all of that person's emails and contacts. This gives them the ability to "impersonate" an agent, title company closer, lender, or even a buyer or seller. Posing as the seller or buyer's agent, or title company closer, the hacker will email the seller to wire their proceeds to a specific account, or email the buyer to wire their down payment to the hacker, when in fact they think they are wiring to a person or company involved in the transaction.
GM: Can you provide 1-2 situational examples.
Joe: We had a buyer that responded to a hacker’s email that stated it was coming from one of our closers, when in fact, we had never emailed this buyer, or had any previous contact—as we had just received their order. The buyer did wire money as instructed in the email. Luckily, because the buyer contacted the FBI and his bank immediately, he recovered his money, but that, I think, is extremely rare.
In another instance, a hacker emailed one of our closers posing as the seller, and sent a copy of a check with a request to wire the seller’s proceeds to the account and bank shown on the check. The problem was, the check was on an account that was not the seller’s. Luckily, we were able to confirm this with the seller, and obtained the correct information for the seller’s account.
GM: How can clients protect themselves from falling victims to cybercrime?
Joe: Changing passwords frequently, using up-to-date virus protection, not clicking on unsolicited links or opening emails from people you don’t know are just some of things that are generally recommended to protect computers and their owners. Perhaps just as important (some people say most important) is to be vigilant, and, particularly in real estate transactions, not rely on email for communication when it comes to closing funds transfers. Before wiring to a title company, consumers should ask their bank to verify the account number and bank. Phone calls and personal contact with someone that you know is who they say they are, are much safer ways to communicate banking information and wiring instructions then using email.
GM: What are some key red flags that you’ve received a fraudulent email?
Joe: Misspelled words and bad grammar, up to now, have been clues to the illegitimacy of the email, but I think in the future, the quality of the hacker’s emails will improve. What we tell customers is that emails asking them to do things that seem unusual are ones to question. We recommend that customers make a phone call to determine if the email has been sent by a credible source. For instance, when a buyer receives an email three weeks prior to closing stating that they need to immediately wire their money to the title company or risk losing the deal, they need to call the title company instead of responding to the email because title companies do not and should not send these types of emails.
GM: What should a client do if they think they’ve been hacked?
Joe: First, they should contact their bank and instruct the bank to immediately recall the wire and open a fraud file with the receiving bank. They should go to ic3.gov and open a fraud complaint and also contact the local FBI and police department.
Joe Crutchfield has been a leader in the St. Louis title industry since he began his career as a staff attorney with Investors in 1986. He became General Counsel and managed the production office until 2000, when he was promoted to the position of President. In 2016, Joe was named CEO.
Investors Title is a leader in St. Louis title services and is one of the largest providers of title insurance and closing services in Missouri. With over four decades of experience, their title professionals invest the time to deliver the consistent results clients expect and deserve.
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