The FBI is alerting us to what they see as one of the greatest financial dangers to consumers and businesses—the Business E-Mail scam. This particular scam is costing American businesses and consumers millions of dollars every year. The scam works in a variety of ways, but the crux of it is as follows: Hackers breach the email account of a business or consumer. They learn the nuances of the victims’ conversation style and steal the email address. They send an invoice for payment to a company or customer. The invoice looks legitimate and there is a long-standing relationship between the parties. The hacker provides an account that he owns and requests that a wire transfer be made. The money is sent.
The Favorite Target of Business E-Mail Scammers is Real Estate Transactions
Hackers involved in business e-mail scams are cunning and choose their targets carefully. They know that during the time before purchasing a home, your head is swimming with tons of details: lining up the closing costs, conducting inspections, securing financing, scheduling the closing and move-in date. It is easy to lose focus and not pay careful attention during this time when you are so pressed with other things. And the hackers know this. They time their approach to coincide with the exact moment when you are least able to confirm that an email message you receive is legitimate.
Here is how it Works
Once a company involved in real estate transactions, such as a title company is hacked, the fraudsters sit quietly and follow the email threads between the company and customer. They mirror the exact language and way of speaking of the company they have hacked. They wait until you reach the last communication with the title company, letting them know, for instance that you are heading to the bank to withdraw the closing payments. Using the same letterhead, phone numbers, tone of voice, etc. they contact you with updated wiring instructions, directing you to send the funds to a different account than previously discussed, which of course, belongs to them.
The business email scam is very successful in the real estate business. They successfully hack into all parties involved in the purchase process—real estate agents, title companies, buyer, seller and even the lawyers. Once inside they bide their time and wait until the last minute to jump in and notify the buyer of a change in transaction plans, typically changing from a check to a wire transfer or changing the account number. Buying a home involves the transfer of probably the largest amount of cash in one’s life. If you fall victim to this scam, you could lose a great deal of money.
Once you discover that you have been the victim of wire fraud, you have only 3 days in which to contact the FBI and attempt to recover your money. According to the FBI, if they receive the report within this window, they have around a 70 percent success rate. After this window has closed, your money has already begun to make its trek through various bank accounts and it becomes much harder to find it. The business e-mail scam could rob you of all the money you saved for the purchase of your home.
Business E-mail Scams are Growing
The FBI reports that wire fraud schemes are increasing. “…Business Email Compromise/Email Account Compromise scams continue to grow, evolve and target small, medium and large businesses. Between January 2015 and December 2016, there was a 2,370% increase in identified exposed losses. The scam has been reported in all 50 states and in 131 countries.” The Report states that between October 2013 and December 2016, $5.3 billion dollars were lost to wire fraud, with $1.6 billion in the U.S. alone.
How to Protect Yourself from a Business E-mail Scam
- Be skeptical of any information that you receive in an email, regardless of the sender. Especially if the email content regards money transactions. Verify all instructions you receive in an email by telephone.
- When calling to verify the information you have received in an email, use the numbers you have already plugged into your phone or look up the previous number from your phone book or business card file. Do not use the number that comes with the email. If the account has been hacked, your phone call will go directly to the hackers who are more than happy to confirm that their thievery is legitimate.
- When transferring money, use a cashier’s check and not direct wire transfer.
- Even though it is easier and all of us normally use this way to reply to emails, during the time you are engaged in a real estate transaction, rather than hitting the reply button, type in the email address yourself or begin a new email thread.
- Check out your real estate vendors, from your agent to the title company. Make sure they are utilizing the strongest and most current cyber security protection software. With some due diligence on your part, you will not fall victim to a business e-mail scam.