RALEIGH, N.C. (WNCN) – Raleigh’s booming housing market has made it a prime target for scammers masquerading as home closing companies.
Marthie Irby found her dream home in North Carolina, but the dream turned into a nightmare because of a scammer.
“I received an email from what I thought was the attorney handling our closing with wiring instructions,” she said.
Three days after wiring $95,000, she found out the money never went to her attorney. She said when she finally talked to her closing attorney by phone, she discovered the attorney had never emailed her asking for funds.
Her situation is not unusual. Millions of dollars a month are being lost to this scam.
How do those home closing scammers do it? It’s simple.
“They’re compromising the closing company’s servers, so they own the email server,” said Dr. Eric Cole, who is a cybersecurity expert with Secure Anchor Consulting.
That means any email sent is being intercepted by the bad guys.
“Don’t trust email,” Cole said.
He added that email is the easiest form of electronic communication to alter and spoof. To prevent being caught in a home closing scam, he said “go old school. Pick up the phone. Go in person to get a signature.”
“It takes 5-10 minutes more, but it’s well worth it to make sure you are protected,” Cole said.
Because a home closing is public record, the scammers use the clock to their advantage when asking for money.
“When money is transferred, you have 24 hours to cancel the transaction,” he said. “Once you get to 48 hours, the money is hard to recover.”
The scammers know that, so they get you to transfer money to two to three days before the closing.
“By the time you show up to closing and realize the money went to the wrong entity, it’s been more than 40 hours and the money is long gone,” he said.
Cole says many closing agents are mom and pop type companies who use their own email servers allowing scammers to compromise them more easily.
He recommends those closing companies start using a cloud based commercial system run by Google or Microsoft which he said have added security.
The bottom line, don’t trust email as secure way to deal with sensitive or financial information–especially when closing on a house.
Because Email is too easy to spoof, call, fax or conduct your business in person.