Wire Fraud Advisory with explanations so agents can clearly address client concerns and reduce the risk of wire fraud in real estate transactions.
- What is the purpose of the Wire Fraud Advisory?
It warns buyers and sellers about the risk of criminals intercepting or altering wire transfer instructions during a real estate transaction, and advises them on how to confirm payment details securely.
- Why is wire fraud such a big risk in real estate?
Large sums of money are transferred in a short time window, making real estate transactions an attractive target for hackers and scammers who often impersonate escrow or title officers.
- How do wire fraud scams usually happen?
Cybercriminals gain access to email accounts, monitor communications, and then send fake wire instructions that look legitimate, directing funds to fraudulent accounts.
- How can buyers and sellers protect themselves from wire fraud?
Always verify wire instructions by calling the escrow or title officer directly using a trusted phone number—not one from the email with the instructions. Avoid sending sensitive information over unencrypted email.
- Should wire instructions ever change during a transaction?
Rarely, if ever. Any change in wire instructions is a major red flag and should be treated as suspicious until verified in person or via a confirmed phone call.
- What should be done if someone suspects wire fraud?
Immediately contact the bank to initiate a wire recall, notify law enforcement, and inform the escrow company, title company, and real estate broker.
- Is it safe to confirm wire instructions by email?
No. Emails can be intercepted or altered. Always confirm in person or via a verified phone call.
- Who is responsible if wire fraud occurs?
Responsibility can vary, but recovery is difficult. Prevention is critical because once funds are wired to a fraudulent account, they are often unrecoverable.
- Can a real estate brokerage be held liable for wire fraud?
Potentially yes, if it can be proven that the brokerage failed to warn clients or did not follow reasonable industry practices to protect client funds.
- What should clients do if they receive an email urging immediate action to wire funds?
Treat it as suspicious—pause all action and verify instructions directly with the escrow or title officer before sending any funds.
- Are there special precautions for international wire transfers?
Yes. International wires have additional risks, longer processing times, and may be more difficult to reverse. Verification steps are even more important.
Disclaimer:
The questions and answers provided are for general guidance only and may not cover all details or apply to every situation. If anything is unclear or you need further clarification, please visit car.org for official resources and the most up-to-date information from the California Association of REALTORS®.
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