Watch Out For Internet Scams

Watch Out For Internet Scams

Watch Out For Internet Scams

Both realtors and attorneys are still falling for internet scams.

If you receive an unsolicited email from someone outside the country indicating they are interested in one of your listings sight unseen, do yourself and the attorney you work with a favor and do not respond. Over the past twelve months I have been contacted by countless realtors who received unsolicited emails from prospective purchasers wanting to buy property in Southwest Florida.

Almost all initial contacts start the same. The individual is interested in MLS#12345 (or whatever the listing may be). The purported buyer then wants to offer extremely close to the full price. The last individual offered $489,000.00 on a $499,000.00 listing. The next step is to ask for the name and address of an attorney where the funds can be deposited. Typically, the email advises that because of the time differences they cannot contact the attorney during business hours. The next step is the purported buyer provides their name and address. The scary part is that if you Google them, the party actually checks out. The reality, however, is that the identity is typically stolen. In fact, I had a world famous surgeon (not actually) from London, England contact several agents all at the same time, who in turn contacted me , wanting to purchase single family homes throughout the MLS.

I tried to persuade one realtor this was a hoax. However, she assured me that his name and address checked out when she called the Medical Center in London they confirmed he worked there. It wasn’t until I forwarded her nearly a dozen similar unsolicited offers that had been emailed to other agents did she actually understand. If a contract does come together, most often with an inspection contingency, a cashier’s check (never a wire transfer) is sent to the attorney.

By all accounts the cashier’s check looks so official; the bank will accept it and immediately provide funds available to the attorney. This deposit is usually substantial. What happens next is the deal falls apart and the buyer requests that all expenses incurred be deducted from his disproportionately large deposit and the balance be wired back to a bank account the fraudster specifically opened for this one deal. After the wire goes out, the bank that accepted the check and made the funds available informs the attorney that the cashier’s check was counterfeit and debits the attorney’s account.

The Florida Bar News has alerted members that this scam has actually worked on countless attorneys who had to borrow funds and replace them with their own immediately as the bank’s act of debiting back the credit resulted in a short fall for other client’s funds (I never said all attorneys were smart, perhaps well educated, but not necessarily smart). There are presently numerous lawsuits pending that attorneys have filed against their banks alleging breach of fiduciary duty, negligence, among other counts. Unfortunately, I am not aware of any suit where the court has favorably ruled in favor of the attorney.

Next time you receive one of the bogus emails, rather than wasting your time hoping to convince yourself it is legitimate, hit spam. In fact, just last week I received an official looking cashier’s check from Canada referencing one of the individuals name that sent the Realtor emails. Ironically, the envelope had no return address, simply a note to email the individual to confirm the check was received and deposited. Needless to say I did neither.

SCAM NUMBER TWO involves fraud with a smart phone. The Florida Land Title Association recently reported that one of its title agents fell victim to a fraud scheme involving a smart phone and the new apps that allow a check to be deposited by using the smart phone’s camera to take a picture of the front and back of the check. The attorney issued a check for the closing proceeds to the seller. A few hours later, the seller returned to the office, returned the check, and requested that instead the proceeds be wired to his bank account. The attorney did not realize that the seller already deposited the check using the new technology. The attorney took the check back, voided it and wired the proceeds as requested, causing a shortage in his trust account.

To avoid this happening to you, keep checks at your side and never leave them unattended if you step out of the room just for a moment. At any time someone can take a picture of the check and deposit it and ask for funds to be wired. As a result, to avoid this potential scam our new rule is to refuse to exchange checks for a wire transfer once the check has left our office. I recognize these tips are geared more for closing agents, however, it is important to be aware of the various types of fraud going on in our industry. Hopefully, none of us will fall victim to one of these scams.