An executive in the Florida title insurance industry has cautioned buyers of commercial properties that the risk of cyberfraud in commercial real estate deals is growing. Fraudsters now seek to profit from larger deals than home sales. Residential real estate previously had been the target.
Here's how the scam works. Someone could pretend to be an executive of the company that is selling the commercial property and direct the buyer, broker or title agent to transfer funds into a specific account at closing. The request often will come from a falsified email address.
Florida, in fact, ranked behind only California in 2017 for the number of fraud transactions, including wire fraud, according to an FBI report.
The industry executive offered these tips to help prevent consumers from being the victim of wire fraud when buying a commercial property:
- Look closely at the address when you receive emails about the pending transaction from a broker, escrow officer or anyone working on the transaction. Verify the address is correct.
- Contact the email sender by phone instead of email. Use the phone number provided on the professional's business card or website. Do not trust that the phone number listed in the email is correct.
- If, at the last minute, you get a request to change how you send the money to complete the transaction, don't follow the instructions without contacting the professionals you've been working with on the purchase. A request like this is very unusual.
- Ask your bank to verify the information about the recipient account before transferring money.
- Once you've sent the funds, call the escrow or title company to make sure they have been received.
The ability to transfer funds electronically has made life so much easier in so many ways. But it's also made it easier for people with bad intentions to pull off scams, too. If you suspect something isn't right in your transaction, don't hesitate to contact your real estate attorney.