Colorado realtors and brokers are being warned to watch out for a scam that cost at least one Colorado property owner close to $83,000.
Denver7 Investigates obtained court documents showing how the costly scam unfolded earlier this year.
According to the documents, Greenwood Village Police spoke with an executive for a land title company who handled a real estate closing for a Denver property. The property owner arranged to have the $82,896 proceeds from the sale wired to her personal account.
But on the day in February the sale was set to close, the closing agent received an email that appeared to be from the seller, instructing her to change the wire transfer and send it to a different account altogether. That email turned out to be from an imposter who used a Mail.com address with the same username as the seller’s Comcast.net email address.
By the time the title company realized the mistake, the proceeds had already been wired to the wrong account and quickly transferred to other accounts.
Greenwood Village Police tried to follow the money out of state but ultimately the investigation hit a dead end. And Denver7 Investigates has learned that was not the only incident in Colorado.
Arvada realtor Karen Nichols learned someone hacked into her email account and tried to convince a client to wire the $65,000 he planned to put down on a new home to a different bank account.
“The double whammy for me was– not only were they in my account, but they were communicating to my clients through my account and I didn’t know it,” Nichols said.
Luckily, Nichols’s client became suspicious and asked the imposter questions she would know the answers to – like the names of her children. The hacker responded incorrectly – but with real names of Nichols’ family members nonetheless.
“I feel they were living in my email because they knew too much about me,” Nichols says. “Had my client not been as smart as he was, not done what he did to protect himself and he did wire that $65,000, who’s liable for that? Where does that go? How do we make that right to the public?”
The Denver Metro Realtors Association has been spreading the word about the scam, trying to prevent it from spreading through Denver’s red-hot real estate market.
“We’re not talking about small amounts of money, we’re talking millions. Millions of dollars that are transferring here just in Colorado alone, tens of millions of dollars every day that are going back and forth,” the association’s spokesperson Anthony Rael says. “Once those funds hit the wire and go through, good luck getting those funds back. You’re not getting them back.”
Just weeks after the Greenwood Village case, the Federal Trade Commission issued a nationwide alert about the phishing scam, urging consumers, realtors, and title companies against conducting financial transactions over email.
The FTC also laid out recommendations for consumers to avoid the scam, including:
Don’t click links in emails to input financial account information, instead going to the organization’s website and typing in the URL manually.
Look for URLs that begin with “https” (the s means secure.)
Always be cautious opening email attachments.
Keep your computer security software up-to-date.
The National Association of Realtors also laid out a lengthy set of recommendations for real estate professionals, including:
Change your passwords often.
Clear out your email account regularly.
Make phone calls to verify account information before wiring money.
Notify everyone involved in the process about the potential for email fraud.