Email, but Verify

by Eric Berman - MAR Director of Communications | Apr 27, 2016
“We were in the middle of the transaction getting close to the closing and the emails were flying back and forth,” said Arnold Humphry*, a Realtor® on Cape Cod. “The buyer and his attorney got an email from the ‘lender’ instructing them to wire the funds by the end of the day instead of bringing a check to the closing…”
Thankfully, the attorney became suspicious and called the seller to verify the request. Of course the seller didn’t understand what the attorney was talking about. That’s when they realized they were one sent email away from losing hundreds of thousands of dollars.

Humphry and his client were lucky. While real estate scams have been around since homes have been bought and sold, the use of scams that take advantage of technology are on the rise. According to statistics from the FBI’s Internet Crime Complaint Center (IC3), in scams like the one Humphry and his client experienced, there has been a 270 percent increase in identified victims and exposed loss since January 2015.  

According to IC3, this type of scam has been reported in all 50 states and in 79 countries. In cases where funds were actually transferred, the money made it to 72 different countries, but the majority went to banks in China and Hong Kong. Over 17,000 victim complaints totaling over $2.4 billion in potential loss were reported to the IC3 from October 2013 to February 2016. 

It’s understandable if the thought of these scams might make you want to swear off technology, but there is some good news too. First, you are not alone, the Federal Bureau of Investigation (FBI) and other federal, state, and local law enforcement are working tirelessly to protect you and your clients. Secondly, these scams are generally preventable if you remain vigilant and aware of your virtual surroundings.

While no one plans to be taken by one of these scams, the perpetrators are getting trickier each day. What should you do if you do become a victim? According to the FBI, you need to report the incident quickly. Although each case is different, the FBI has a high success rate in getting funds returned if you report the loss within three days of it happening–best if you report it the first day. After three days, the chances for recovery of the money drops significantly (check out the sidebar “I’ve Been Scammed: Help!” on page 15 to find out the steps to take if you are victimized.) 

In addition to increasing the odds of getting the funds returned, providing information quickly allows the FBI to connect the dots between other frauds. If they’re able to get IP addresses, bank accounts, and other digital fingerprints used by the scammers, it will increase the likelihood that the fraud ring can be squashed. 

The best way to stay protected from these scammers is to know their scams and some of the warning signs. Then you need to be sure to educate your clients that scams exist and anyone can be a victim. Below are the three most common scams going on in the real estate industry. However, as you can imagine, these criminals are very creative and always coming up with new ways to separate victims from their money. You need to stay vigilant and suspicious.


The fraud that Humphry and his client were targeted by is what is called a Business Email Compromise scam or “BEC.” This scam targets businesses of all types and not just real estate companies. The fraud works when scammers are able to compromise legitimate business e-mail accounts by manipulating people to give up confidential information (also known as social engineering) or through hacking to conduct unauthorized transfers of funds.

These scams can be difficult to identify as fraud, because the perpetrator may have detailed and accurate information from monitoring email conversations. The emails might come from the compromised account or a “spoofed” account (a fake account) with a real domain name or an email address with a hard-to-spot variation of the real email address.

“I couldn’t believe the scammers could filter out and delete incoming messages to me from the seller, buyer, and the attorney,” said Melissa Richards*, a Realtor® in Greater Boston. “I was blind and they were emulating me in this transaction. It was spooky and it felt like I came home to a burglarized house.”

Another reason why the BEC scam is difficult to stop is because the scammers use legitimate bank accounts to accept the wired funds. In fact, these bank accounts are usually obtained through scams as well. The scammers dupe unsuspecting “money mules” through work at home, secret shopper, or even romance schemes. 


In this fraud, the Realtor® receives a legitimate-sounding email from an international buyer who wants to buy a listing sight-unseen. The “buyer” then sends a check to the listing agent for more than the required amount. The buyer then realizes the “mistake” and asks the Realtor® to wire the difference back. 

The scam works because the international check is fake and it takes banks some time to confirm the validity of the account. While the funds may appear in the agent’s account, the money isn’t “real”  until the check clears. It’s during this short period of time that the buyer is getting the money wired back from the agent. Unfortunately, once the bank discovers the fraud, the funds are removed from the account. Any money that was sent back to the seller is “real” and the account owner is responsible for it.


While this scam gained prominence several years ago, it continues to happen on a regular basis. The scammer in this fraud will search listings on the MLS and other real estate sites such as, Zillow, and Trulia and use the listing photos and information to set up a fake posting on Craigslist. There are a few common traits these postings have. 
  • The “rent” is significantly below market rate;
  • The “owner” is often times going on a religious mission to a foreign country and is looking for a “good family” to live in the unit while they are away (this is justification for the below-market rent);
  • Transaction needs to happen quickly because the owner has already “left for the trip”; and
  • The scammers ask to receive the money by check or wire and they promise to send the keys. 
Often these Craigslist ads have poor grammar usage, but the ads work because the  victim is hungry to find a good deal. This desire pushes them to look past some of the obvious warning signs and they still send the money. Some scammers will even continue keeping the fraud going by sending back a random key. Many times the victim only knows they were scammed when they show up at the listing and try to move in.

“We are not seeing this scam as much these days as we used to, but they are still out there,” said Jay Chaisson, Esq., vice president & general counsel, Jack Conway & Co., Inc., in Norwell. “However, it’s amazing how convincing these ads are and how well they can work. The victims want to believe that they got such a great deal that it can be hard to convince them it was a scam.” 

Prevention is Key

The cliché “an ounce of prevention is worth a pound of cure,” couldn’t be truer when it comes to protecting you and your client from these different scams. While not every point is applicable to every instance, taken as a whole, they should significantly increase your chances to stay safe and out of trouble. The following tips come from the National Association of Realtors® and the FBI.


  • From the very start of any transaction, communicate and educate.  Get all parties to the transaction up to speed on fraud “red flags,” and make sure everyone implements secure email practices.    
  • When wiring money, the person doing the wiring should pick up the telephone and call the intended recipient of the wired funds immediately prior to sending the funds in order to verify the wiring instructions. Adding a secondary sign-off is also another layer of protection you can add.
  • Remember to use only independently verified contact information.  Don’t trust  phone numbers on emails or on website addresses provided in the emails.
  • Regarding wire transfer payments, be suspicious of requests for secrecy or pressure to take action quickly.

  • Be wary of free, web-based email accounts, which are more susceptible to being hacked.
  • Whenever possible, avoid sending sensitive information via email.
  • If you must send sensitive information via email, make sure to use encrypted email.
  • If an email looks even slightly suspicious, do not click on any links in it, and do not reply to it.
  • Clean out your email account regularly.  You can always store important emails on your hard drive.
  • Do not use free Wi-Fi to transact business.
  • Use strong passwords and change your  password regularly.
  • Be careful when posting financial and personal  information to social media and company websites.
  • Use Google Image Search to verify Craigslist home rental ads to check if the image being used has been scraped from another website/real estate listing.
These tips are a good start to staying safe, but educating your clients is the most important first step. It is also recommended that you work with IT and cybersecurity professionals to ensure your email accounts, online systems, and business practices are as secure and up-to-date as possible. NAR also has great resources for Realtors® and has created a Data Security and Privacy Tool Kit ( Also go to the FBI’s Internet Crime Complaint Center ( for the latest information on scams. 

Need to contact the Boston Field Office or want to learn the necessary steps to report a scam? Click here for the sidebar piece for this feature story.