Cyber scams are becoming more frequent and cyber criminals are getting more sophisticated. One popular scam that has been occurring more frequently involves a last minute change in wiring instructions. The scam works, with some variations, in the following manner: one party receives an email with a last minute change to the wiring instructions. The victim receives the instructions and then wires the funds to the cyber criminal’s account. Once the funds are received, the funds are withdrawn and the account is closed.
There are two simple steps to help prevent becoming a victim to such a scam: (1) advance communication and (2) verbal verification. (Note: this short article does not focus on ways to prevent cyber criminals from gaining access to the email addresses and other information required for this scam.)
Two key elements to a successful scam are timing and believability. Successful scams feed off of the hectic nature and timing of transactions. High volume real estate accounts are frequent targets. To be believed, the message with an instruction change has to look real. The email’s timing adds to the believability if the recipient is too busy to pay careful attention. In order to appear legitimate, the cyber criminal’s email will often impersonate a party involved with the transaction. Look for things like a slight variation in the email address. For example, the l in Joneslaw@xyz.com can easily be changed to a 1 in courier font and look like the same email address (e.g. Joneslaw@xyz.com vs Jones1aw@xyz.com). Even if you recognize the email address, NEVER trust email. Verify, verify, verify. The content of the email must also be believable. Often the reason for the change is a lost check or an overlooked bank policy. Below is a sample of a possible scam email.
Dear victim:
I have just been informed by our accountant that we cannot receive a wire into our conveyancing bank account in an amount less than $100,000. Please disregard the previous wiring instructions and ensure that the funds are wired to the attached subsidiary wiring instructions immediately for tomorrow’s closing.
Email me if you have any questions.
Regards,
Cyber Criminal
Advance communication raises awareness and helps prevent a party from sending the funds to a cyber criminal. Make sure that all the parties that you are dealing with AND your bank know that you will NEVER send a change in wiring instructions via email. Maintaining a good relationship with your bank and lender is important in helping to prevent fraud. Even if your bank and lender are familiar with your policies and wiring instructions, it is a good idea to remind them each time you handle a transaction. Cyber criminals take advantage of complacency. If you are dealing with a buyer or other client that is sending you funds one time only, make sure that you give them the wire instructions in person and / or verify verbally. Also, make sure they are aware that any instruction changes must be confirmed directly with you. Below is sample language that some lawyers send with every email.
FRAUD ALERT: If you receive an email from this office requesting that you wire or otherwise transfer funds, you must confirm the request and any corresponding instructions by telephone with this office before you initiate any transfer. Email accounts of lawyers and other professionals are targets of cyber criminals that use information in an attempt to initiate fraudulent wire requests.
Verbal verification helps prevent a party already intending to send funds from actually sending the funds to a cyber criminal by verifying the legitimacy of any requested changes to the original wiring instructions. Make sure that all parties you are dealing with, including the bank, the lender, and the clients, know that they must speak to you directly and they must receive verbal confirmation of wiring instructions. Conversely, if you receive changes to wire instructions, YOU must call the sender and speak to your contact to verify any changes in the wiring instructions. In some reported cases, cyber criminals have actually sent an email then followed up with a phone call to the victim, purporting to be a representative of the other party, to confirm the change in instructions. The only way to prevent this scenario is by calling your contact representing the party that purportedly requested the change in wire instructions and verifying the change directly.
Cyber scams are becoming more frequent and cyber criminals are getting more sophisticated. The best practice is often to take a step back, slow down, and verify the old fashioned way – with one on one contact and verification.