Consumer Alert: Colorado home buyers and sellers need to beware of cyberscams

Scams involve fraudulent wire transfer instructions.

DENVER (May 2, 2017) – The Colorado Division of Real Estate (DRE) and the Colorado Division of Insurance (DOI), both part of the Department of Regulatory Agencies (DORA), again warns consumers to beware of an international cyber-scam that steals money directly from home buyers and sellers.

Both divisions have received complaints from consumers and industry groups that these scams continue to ensnare people. Issues come to both divisions, as the Division of Real Estate regulates real estate brokers and the Division of Insurance regulates title insurance agents and agencies.

“This can cause real, immediate harm to Colorado consumers,” said Marcia Waters, Director of the Division of Real Estate. “The sale of a home can involve hundreds of thousands of dollars, and this scam leaves people at the closing table without the money and without the home.”

“As criminals get more sophisticated in carrying out these scams, the public has to remain ever more vigilant,” added Insurance Commissioner Marguerite Salazar.  

In one version of this scam, cybercriminals hack the email accounts of real estate brokers, title companies, or consumers who are in the process of buying or selling a home. They create alternative email accounts with just minor changes to the name of the email account, which often goes unnoticed by the recipient of the email. Using information from the hacked accounts, they then send fraudulent wiring instructions.

As Commissioner Salazar said, being vigilant can be key. The DOI received a complaint concerning $270,000 in seller proceeds that had been misdirected in this cyber scam. The title agent identified the fraud after receiving suspicious telephone calls about the wired funds. The title agency was able to recover the $270,000 before it reached the the fraudster's account.

The DRE received a call from a brokerage whose client lost $220,000. The client, who was purchasing a home, received a fraudulent email that appeared to be from the title company, with instructions on wiring the money. However, the wiring instructions directed them to a fraudulent account outside of the U.S. The scammers were able to mimic the title company’s email look and feel, while only slightly changing the address of the email’s origin.  

Buyers and sellers can protect themselves from becoming a victim of wire fraud by following these tips.

  • Verbally contact your broker:  Prior to wiring any money, you should always verbally contact your real estate broker to confirm that the wiring information is accurate. Go through the information in detail regarding account numbers and amounts. Do not rely on telephone numbers, email or website addresses provided within an unverified email.
  • Do not email financial information:  Emails and texts are not secure methods to transmit financial information.
  • Keep a record of websites that hold your financial information:  And before providing that information, confirm that the  websites in which you input financial information are secure. Look for the URL to start “HTTPS” - the “S” stands for secure.
  • Don’t click on links:  Don’t use links in emails to get to websites. Fraudsters can easily create a false website that looks like that of a legitimate or well-known company and give that address to you in an email. Instead, search and find the company and directly link to their website from your search.
  • Update your computer:  Keep your operating system, browser and security software up-to-date.

Report any fraudulent activity to the Federal Bureau of Investigations through its Internet Crime Complaint Center

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The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues.  Visit dora.colorado.gov/insurance for more information or call 303-894-7499 / toll free 800-930-3745

The Division of Real Estate is the licensing, regulation and enforcement agency for the real estate broker, appraiser, community association manager and mortgage loan originator industries. The Division also registers homeowner’s associations and certifies the holders of conservation easements.

DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675

 


Media Contact:
Vincent Plymell
Division of Insurance
p: 303-894-2261 | c: 303-910-9614