(It’s a lot to say – SupercaliFRAUDulisticexpialidocious)
Email can be sinister. It can encourage changes (not authorized, not legitimate), it can “warn” recipients of dire circumstances if instructions are not followed, it can be shaped and branded to look like an institution all parties are familiar with, and it can assist in fraud that involves any number of untoward outcomes – like clients’ and institutions’ funds being pilfered.
The U.S. Government has a phrase for such criminal action: Business Email Compromise/Email Account Compromise (BEC/EAC). That wordy title speaks to two crimes.
BEC scams are carried out by compromising legitimate business email accounts. The EAC component of the scam refers to the targeting of consumers and the lenders, real estate professionals, attorneys and others who serve them.
More information on BEC/EAC fraud prevention and recovery can be found on our Education page.
It can be daunting to try to wrap one’s brain around every single possibility and scenario that could trip someone up – and trick someone into giving away information that affords a thief the opportunity to steal funds.
Below is a list that, while not necessarily “completely memorizable” – even if studied, can serve as a red flag for knowing when something is awry.
It can serve as warning to be wary of the many and various paths that crooks can take to defraud legitimate people conducting real estate transactions.
- Exercise extreme caution when weighing any request to change wire instructions. Encourage all parties to do the same.
- Be wary of any email, phone call or other communication that involves threats, high pressure language (e.g. markings, assertions, or language designating the transaction request as “Urgent,” “Secret,” or “Confidential,”) or warns of “dire consequences” if immediate action isn’t taken.
- Be wary of emails with missing or unusual subject lines.
- Be wary of any request to change wiring instructions, especially any last-minute requests.
- Be wary of emails that include poor spelling or grammar, are overly formal or that are written in a style uncharacteristic of the purported sender. Also, beware of emails that misuse industry terminology, for instance, references to the “HUD” instead of the “Closing Disclosure”.
- Be wary of any unexpected emails or requests, including internal requests purportedly from executives or others.
- Be wary of emails sent at odd hours.
- Be wary of any communication seeking to confirm information the purported sender should already have.
- Beware of sudden changes in business practices. For example, if a current business contact suddenly asks to be contacted via a personal email address, it’s best to verify the legitimacy of the request via other channels.
- Review monthly escrow statements from the Receiving Bank (the one holding the agent’s escrow account) as soon as available to verify that all expected funds have actually been received.
- Have a written agreement in place with the Receiving Bank (the agent’s bank which holds the escrow account and receives the agent’s payment order) that the Receiving Bank will match all names, addresses, account numbers, routing number and beneficiary bank name on the payment order with where and to whom the funds are actually sent. Or put instructions on the payment order for the Receiving Bank to verify authorization by matching all of this information.
- Emailed transaction instructions directing wire transfers to a foreign bank account that has been documented in customer complaints as the destination of fraudulent transactions.
- Emailed transaction instructions directing payment to a beneficiary with which the customer has no payment history or documented business relationship, and the payment is in an amount similar to or in excess of payments sent to beneficiaries whom the customer has historically paid.
- Emailed transaction instructions delivered in a way that would give the financial institution limited time or opportunity to confirm the authenticity of the requested transaction.
- Emailed transaction instructions originating from a customer’s employee who is a newly authorized person on the account or is an authorized person who has not previously sent wire transfer instructions.
- A customer’s employee or representative emailing financial institution transaction instructions on behalf of the customer that are based exclusively on email communications originating from executives, attorneys, or their designees when the customer’s employee or representative indicates he/she has been unable to verify the transactions with such executives, attorneys, or designees.
- A customer emailing transaction requests for additional payments immediately following a successful payment to an account not previously used by the customer to pay its suppliers/vendors. Such behavior may be consistent with a criminal attempting to issue additional unauthorized payments upon learning that a fraudulent payment was successful.
Review and revisit this list of tips when handling suspicious wire requests, before the exchange of funds takes place.
- Verify all wire instructions with an alternate method of communication.
- Check emails to ensure the sender’s address has not been altered. Fraudsters typically use email addresses that closely resemble a seller’s (or any party’s) actual email address.
- Do not open unknown or unverified hyperlinks or downloads. Tip: Hovering your mouse over the sender’s email address may reveal a different email address. Caution: Do not hover over unknown links within the body of a suspect email. Security experts formerly recommended hovering as a way to determine the validity of such links. However, newer strains of malware may infect a computer when the user merely hovers over the link.
- Delete unsolicited emails from unknown sources.
- In the case of an invoice, verify any changes in vendor payment location and confirm requests for transfer of funds.