Scammers Target Real Estate Buyers Through Email Schemes
(KPIX 5) -- The San Francisco Bay Area, one of the hottest real estate markets in the country, is also turning out to be a prime target for cyber-criminals who are hacking realtors' email accounts and sending home buyers false instructions to wire money.
It happened to East Bay realtor Kristina Solovieva. Last year, criminals hacked her Gmail account, and waited for just the right time to strike. "The timing was impeccable, actually," Solovieva said. Just when it was time for one of Solovieva's clients to send the remainder of their down payment to close escrow, the scammers sent the buyers an email from Solovieva's account.
The email, seemingly from Solovieva, instructed the buyers to wire hundreds of thousands of dollars to an account. Luckily, the amount was off by $30 – enough to make the clients suspicious. "They were very savvy, and they did the math, and it didn't add up," said Solovieva.
But some do fall for it. San Francisco attorney Matthew Borden is representing a buyer who wired over $500,000 to a scammer after allegedly receiving a false email from her realtor's account. "She was crushed," Borden said. "This was her life savings." In this case, Borden blamed the realty company, Zephyr, for not protecting its accounts from intrusion. "First of all, they should have maintained good security themselves," said Borden.
Zephyr denied it is responsible. In an email to KPIX 5, company president Randall Kostick called it an "unfortunate case," and said "no one at our company gave instructions concerning the wiring of her deposit funds (that was the scam artist who did that.)" It also said the FBI is investigating and it's possible that the hack took place "in the title company's system" or perhaps, the buyer's email account. Kostick did acknowledge the email the victim received "did appear to originate from our agent."
Zephyr also said the problem is "much more prevalent than most people are aware of." The National Association of Realtors and the FBI have recently issued warnings about sophisticated email scams targeting the real estate industry. The NAR's warning advises "Start from the assumption that any email in your in-box could be a targeted attack from a criminal."
Matt Fuller, President of the San Francisco Association of Realtors, said realtors aren't the only ones being hacked. "It can be the agent's email, it can be the title company, it can be a lender, It can be a transaction coordinator," he said.
But the crime is always the same: impersonating someone involved in the transaction by sending emails from their account and provide instructions to wire money, at precisely the moment the client is expecting to make a payment. The Bay Area is particularly vulnerable because it's a hot market and buyers are doing deals quickly, according to Fuller. "There is this urgency associated with transactions."
Solovieva believes the scammers were "watching us all along and reading all our correspondence ... It's creepy."
The California Association of Realtors is now advising real estate agents to include a "Wire Fraud Advisory," in the mountain of paperwork presented to buyers. It says "While wiring funds is a welcome convenience, buyers and sellers need to exercise extreme caution."
Solovieva, who has since added layers of security to her email account, shares her hacking experience with clients, hoping to make sure the message hits home. "It's not being discussed a lot, but it's out there."