{"id":63679,"date":"2019-07-12T11:45:51","date_gmt":"2019-07-12T11:45:51","guid":{"rendered":"https:\/\/blog.myewm.com\/?p=63679"},"modified":"2019-07-12T11:45:51","modified_gmt":"2019-07-12T11:45:51","slug":"buyer-bilked-out-of-123k-just-like-that-its-gone","status":"publish","type":"post","link":"https:\/\/blog.myewm.com\/?p=63679","title":{"rendered":"Buyer Bilked Out of $123K: \u2018Just Like That, It\u2019s Gone\u2019"},"content":{"rendered":"
An Oregon buyer lost his downpayment after an email scammer hijacked his title company\u2019s email account. Now he\u2019s trying to help other buyers avoid the same fate.<\/div>\n
\n

CHICAGO \u2013 After a yearlong search, Aaron Cole and his family finally found their dream home in Canby, Ore., in December 2018. The seller accepted Cole\u2019s $440,000 offer, and with a downpayment of $123,000, he and his wife were ready to move in just in time to celebrate Christmas and their son\u2019s fifth birthday.<\/p>\n

Nothing seemed amiss when Cole received an email during the closing process with wiring instructions for his downpayment. The email, which appeared to come from his title agency, listed Cole\u2019s agent, loan officer and other parties involved in transactional documents, along with correct contact information for each. So, Cole followed the instructions and completed the wire transfer.<\/p>\n

Eight days later, he received a phone call from his title agency, WFG National Title Insurance Company, providing wire instructions for his downpayment. That\u2019s when Cole realized he had sent his family\u2019s life savings to a scammer.<\/p>\n

Over the next few days, he worked with his title agency, bank, federal investigators and police to recover the funds. Every dime of his $123,000 downpayment was lost and untraceable.<\/p>\n

\u201cYou spend your entire life to save to buy a house, and then, just like that, it\u2019s gone,\u201d Cole says. The most heartbreaking part of the ordeal was telling his wife they could no longer afford to buy the house, Cole adds. They were stuck, having already sold the house they were living in at the time, with no place to go.<\/p>\n

Stop this from happening to your client<\/strong><\/p>\n

Cole isn\u2019t alone: Reports of real estate-related email phishing scams jumped 1,100% between 2015 and 2017, according to the Consumer Financial Protection Bureau (CFPB). The CFPB estimates a loss of nearly $1 billion in real estate transactions from such scams.<\/p>\n

Cole says he remembers the bright red \u201cWARNING\u201d labels about cyber scams in the transaction documents he signed. \u201cI really don\u2019t think there\u2019s any bigger warning or messaging a company can do about the dangers,\u201d he says. \u201cBut it\u2019s also just another warning on a document. You see it, sign, and move on to the next one.\u201d He adds that he wishes his real estate agent had warned him in person.<\/p>\n

Bruce Phillips, senior vice president and chief information security officer at West, a WFG company, says it\u2019s critical for real estate professionals to educate clients about the risks.<\/p>\n

\u201cA real estate professional has the opportunity to sit down and look the client in the eye and say, \u2018This is a problem,\u2019\u201d Phillips says. \u201cI believe that has a better chance in getting in someone\u2019s mindset. It\u2019s happening more than you think. \u2026 There is no amount of technology that you can buy that will stop this. This is a processing problem that the industry needs to address.\u201d<\/p>\n

Be mindful of oversharing in transactions, Phillips says. Several parties are usually included on emails containing housing-related documents \u2013 the buyer\u2019s agent, listing agent, loan officers, title representatives and assistants, among others \u2013 and any unfamiliar email address tacked on to the message is an indication that a hacker may have infiltrated the email chain, Phillips warns.<\/p>\n

\u201cUnsecure email and mobile devices are particularly at risk, and consumers are vulnerable at emotional times with title deadlines, such as home closings,\u201d Phillips says. \u201cIt\u2019s so easy to make it look like you\u2019re someone else on email. Never trust an email. It can become tragic very quickly.\u201d<\/p>\n

Becoming the face of wire fraud victims<\/strong><\/p>\n

As for Cole, his purchase transaction remained in jeopardy for days. His family lacked extra funds to make up for his stolen $123,000 downpayment, and his approved $300,000 mortgage wouldn\u2019t cover the entire cost of the home he was buying.<\/p>\n

In an unusual move, his title agency, WFG, offered to hire him as a spokesman for its newly created Cyberfraud Awareness Team to educate consumers and the housing industry about wire fraud in real estate transactions. Cole\u2019s salary: $123,000.<\/p>\n

With this olive branch, he and his family were able to move in according to their original plan, and they spent Christmas together in their new home. Most wire fraud victims, though, aren\u2019t so lucky. Phillips knows of situations where buyers lost their entire savings and were left homeless.<\/p>\n

Cole doesn\u2019t take his new role as the face of wire fraud victims lightly.<\/p>\n

\u201cYou hear about this type of scam, you see the warnings, but you never know of anybody who it actually happened to,\u201d Cole says. \u201cWe then start to assume that we\u2019re somebody who is smart enough that we\u2019d never fall victim to something like this. I\u2019m a tech person; I never would have thought it could happen to me. I want everyone to know what I know now \u2013 that it can. And to be aware so that we prevent this from happening to a lot more.\u201d<\/p>\n

CFPB Tips to Fight Cyber Scams<\/strong><\/p>\n

The CFPB recently issued another warning about the growth of phishing scams targeting real estate professionals\u2019 email exchanges with clients. The CFPB offers these tips on keeping transactions safe:<\/p>\n