New scam affecting Pennsylvania Realtors® and home buyers

A new hacking scam has unsuspecting home buyers in Pennsylvania following email instructions to wire money to purchase their dream home, only to learn that they were scammed.

The scam has happened twice so far, according to Monroe County Chief County Detective Eric Kerchner. In Stroudsburg, the buyer, Realtor® and abstract company were communicating by email, exchanging contracts, negotiations and closing documents.

On the day of the closing, the buyer received an email from the Realtor’s® Gmail account, directing the buyer to wire the funds of the cash sale to an account in Florida.

“Because the buyer had been corresponding with the Realtor® via email throughout the negotiating period, the email wasn’t questioned,” said Kerchner.

The buyer wired the money to the routing and account number listed in the email. A few hours later, the buyer received another email from the abstract company with a different set of instructions on where to wire the money, explained Kerchner.

The buyer called the abstract company and the Realtor® stating that he had already wired the money following the instructions provided in the email. That was when it was determined that the email was bogus. The buyer immediately called the bank in Florida.

Of the money wired, $27,000 of the $36,000 was recovered, as an unsuspecting third party had been tricked into receiving it, and thus police could recover most funds.

Kerchner said through the investigation, they determined the email originated in South Africa. “Apparently the South African fraudster somehow obtained the username and password of the Realtor®, monitored all of the email transactions between the Realtor®, buyer and title company and then, knowing that the buyer would be receiving wiring instructions on the date of closing, sent a bogus email early that morning with his own set of wiring instructions,” he explained.

The exact same situation occurred in Mount Pocono, with a different Realtor®, title company and buyer, except in that case, the buyer lost a substantially larger sum of money.

So how can a Realtor® protect themselves? Kerchner advised not using a Gmail or Yahoo email account for professional business. Instead, use a professional business email address, since they usually come with private or commercial servers.

He also suggested changing your email password frequently, especially during a negotiation period. And if you are sending wiring instructions, make sure to note you will follow up with a phone call, and do so.

As for your clients, they can protect themselves by changing their email password frequently, and following up on any financial transaction instructions with a phone call to the Realtor® for confirmation, and using only a phone number previously used to contact the Realtor®.

However, it’s not just happening in Pennsylvania. The National Association of Realtors® recently published an article warning of similar scans that are happening across the country, with some additional advice on protecting yourself and your clients.