It sounds technical, but this topic is not. It is about protecting yourself in the day and age of technology. Fraud can happen anywhere and anyone can be a victim. It would seem that the easiest way to gather information from unsuspecting victims is through a method called social engineering.
No – it has nothing to do with engineering. In this context, social engineering is the act of using established trust to gain information about someone in order to exploit their technology in a manner that would harm them.
A good example of this in a real estate transaction is wire fraud. You’re currently in contract to buy a house and you receive an email (seemingly) from your Realtor that instructs you to wire $10,000 to the title company in order for the transaction to proceed. Trusting your agent, you call your bank and have the transfer setup to the account indicated in the email you have received. You call your agent to tell them you have transferred the money at which time they state they have never asked you to transfer any money. At this point, let’s hope that the wire transfer can be stopped.
How did this happen though? Social engineering. Likely in this scenario, someone was able to obtain your email login. They then searched your emails and saw that you were currently involved a real estate transaction and then spoofed an email from your real estate agent. It seems quite elaborate just to trick you, however most of the time, the people trying to steal information and money from you are part of a much larger fraud scheme and likely you are one in a group of thousands or tens of thousands that were frauded at the same time.
So how can we avoid this? Well, that is going to require some cooperation on both your part as a buyer or seller and your agent’s part.
When you begin working with an agent, ensure they lay out a communication plan with you. I am always sure to tell my clients that I use many different methods of communication such as phone calls, email, text, and dotloop. TELL YOUR AGENT which you would prefer. If I am going to be sending documents or anything to my client, I generally send it via dotloop or email and then text or call them and tell them I have sent it.
From the agent stand point, we should all have statements in our signatures warning for the potential of wire fraud. The same goes for a confidentiality statement.
Ensure that you are using strong passwords and change them regularly. In the business world, changing your password at least once every 90 days is a standard practice however for the average at home user, once per year is adequate. Use a combination of letters, numbers, symbols and capitalize letters. This ensure better security and they are harder to guess. If you think your account has been compromised, change your password – do not even hesitate. If there is a chance, it is better to be safe than sorry.
Watch out for emails where the sender does not have very good English or has many spelling or grammar issues. And before you click on a link, look at the domain name (something.com) and see if it’s a site you recognize. If you click on a link and it asks for your username and password, I would suggest closing out of it and then typing the website into your address bar yourself instead of using the link.
While most agents would not be dealing with wire transfer, if it does happen, your agent should contact you prior to initiating the transfer. If you receive something asking you to transfer money and you are not sure what it is, call your agent or your title company to verify its legitimacy.
Stay alert of any strange emails you get. With all of the technology used in real estate including email and document management systems, not to mention all of the people who are actually involved in a transaction, it is not out of the question to get messages from people who you do not recognize asking you for documentation or to verify something. If you are not sure of the validity of a communication, do not be afraid to contact your real estate agent or your title agent.
Guys, the bottom line here is to be hyper vigilant and aware of what is going on. If you have questions, ask someone! As a Realtor, if I do not know, I will find out for you. Do not assume anything.