FBI Says BEC Scams Targeting Real Estate Increasing
June 20, 2023
In a June 9 Public Service Announcement, the FBI reported that business email scams (BEC) targeting the real estate sector are once again on the rise.
From 2020 to 2022, there was a 27% increase in victim reports to the FBI’s Internet Crimes Complaint Center (IC3) of BECs scams connected to real estate. During the same period, the FBI reported a 72% increase in victim loss due to BECs involving real estate.
The announcement said BEC scams target all participants in real estate transactions, including buyers, sellers, real estate attorneys, title companies and agents, and “[o]nce BEC perpetrators gain access to a participant’s email account involved in a real estate transaction, they are able to monitor the real estate proceeding” and use their access to commit wire fraud.
Tips to Prevent Wire Fraud
BEC scams are typically the precursor to wire fraud. Here are some tips to prevent wire fraud for title companies and their customers:
- Verify wire transfer instructions: Before sending a wire transfer, customers should verify the instructions with the title company using a known phone number or email address. They should not rely solely on the instructions received in an email.
- Use multifactor authentication: Title companies should require customers to use multifactor authentication, such as a password and a security token, to access their accounts.
- Educate employees: Title companies should provide training to their employees on how to identify and prevent wire fraud. This can include education on how to recognize phishing emails and how to implement best practices for computer security.
- Implement secure email systems: Title companies should implement secure email systems that use encryption and other security measures to protect against hackers.
In November, the FBI released a report that summaries its efforts to combat BEC scams and real estate wire fraud by working with partners to identify perpetrators and dismantle their organizations. The report was also spurred by ALTA’s efforts the past two years to get language included in various House and Senate appropriations reports directing respective agencies to report on efforts to combat and raise awareness of BEC and wire fraud, and collaborate with industry partners to address threats.
Earlier this year, ALTA released a revision to its Best Practices. Included in the update, were changes to the use of wire verification services and use of manual or electronic methods for daily reconciliation, and specific action of identification and investigation of discrepancies, as well as revisions to protecting non-public information.
- Video: Protect Your Money from Wire Fraud Schemes
- ALTA Outgoing Wire Preparation Checklist
- ALTA Rapid Response Plan for Wire Fraud Incidents
Contact ALTA at 202-296-3671 or email@example.com.