Cybercrime is an unfortunate reality for many large institutions such as Target Stores and credit card companies as well as some individuals; sadly, cybercrime is also a potential threat in real estate transactions.
Although wiring funds directly to escrow is still viewed by the real estate industry as a better practice than having real estate agents physically transporting Buyers' deposit checks, hackers who are able to monitor internet traffic have intercepted e-mails from escrow officers to Buyers and have altered the wiring instructions to misdirect the Buyer's funds into the hacker's own account.
The altered e-mails that are ultimately received by Buyers appear to be genuine in that they contain the Title Company's e-mail information and/or logos. Sadly, if Buyers transferred their funds pursuant to the altered wiring instructions, their money was stolen with little or no chance that the money would ever be returned.
Conversely, if Sellers are to receive their sales proceeds by wire transfer from the escrow holder to their bank, this same type of fraudulent activity could occur.
To protect your funds and to avoid identity theft, you are encouraged to take appropriate, immediate steps to secure the computer systems that you use along with all e-mail accounts. Buyers and Sellers should confirm all e-mail wiring instructions directly with the escrow officer by calling the escrow officer on the telephone; in that conversation the correct account number information should be repeated verbally before taking any steps to have the funds transferred.
If there is any indication that Buyers, Sellers or anyone else has received questionable wiring instructions, you should promptly notify your bank, your real estate agent and the escrow holder.
There are many on-line sources that can provide useful information regarding this topic including, but not limited to, the following sites:
