WIRE FRAUD CAR FORMS ARE NOW OUT>

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WIRE FRAUD CAR FORMS ARE NOW OUT>

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

AS we all know its rampant...

I was just signing a sale contract on a CA flip we sold and there is now a CAR form that buyer and seller sign that delineates the risk and how to protect yourself against wire fraud.

talking to an escrow officer yesterday one of her clients lost 83k this week.

Careful out there folks.. double and triple check all wires.. do not rely on e mail.. Any one changes their wire coordinates that's a cause to get on the phone and double check.

We got hacked and stopped one potential one its was a small one 15k but still.. don't want to lose any money.. we are uber careful on this ..

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Nick G.
Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
9y

@Jay Hinrichs @Mindy Jensen @Michael Lim @Joseph M.@Joel Owens

Wire fraud is becoming rampant, so within C.A.R., we worked alongside authorities to develop the Wire Fraud Advisory. It is not a disclosure, but it is a highly recommended advisory to include in all purchase contracts.

If anyone you know becomes affected by wire fraud, you can contact me immediately, I have a direct number to one of the lead agents of the FBI's Los Angeles Cyber Division that I can connect you to thanks to my work with him within C.A.R. 

Time is of the absolute essence in these situations, every single hour is crucial.

The other action to take is to immediately file a complaint with ic3.gov. The FBI monitors this site constantly, and alongside the phone call we'll make, we can get attention to your situation even faster.

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  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    9y

    @Jay Hinrichs I never lost money on a wire when I used to order items from China, I could see a phishing email. I sign up for experimentation a "Merchant Cash Advance" a week later, I counted 34 emails/letters and 97 calls that I was pre-qualified for 50k or greater. That was 6 months ago, I still get calls today. You ask for a website, they won't have one. lol.

    1Reply
  • Account Closed
    Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Manolo D.:

    @Jay Hinrichs I never lost money on a wire when I used to order items from China, I could see a phishing email. I sign up for experimentation a "Merchant Cash Advance" a week later, I counted 34 emails/letters and 97 calls that I was pre-qualified for 50k or greater. That was 6 months ago, I still get calls today. You ask for a website, they won't have one. lol.

     still there is at least 5 posts a day asking about this lender at 5% rates with 0 down only an application fee 

    1Reply
  • Michaela W.
    Aspen, CO · Member since 2017 · 1 post · 1 vote
    9y

    This has happened in the Aspen Valley as well. It just goes to show how important internet security is for doing any kind of business these days, especially one where you're handling the life savings of some people. 

    1Reply
  • Kalimah Jenkins
    Investor · Marietta, GA · Member since 2014 · 226 posts · 97 votes
    9y
    Jay Hinrichs Just signed one here in GA too. Check those routing and account numbers. There's an attorney's office here that sends you wiring instructions via email but they leave off the last number to ensure that you call them first before sending the wire.
    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Kalimah Jenkins  I really like that Idea that forces folks to be safe and hop on the phone.... its sad but this is what we have to do to protect ourselves... we wire probably 1mil or so a week out of my office sometimes more sometimes less.. and its just critical now that we are super diligent..

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  • Michael Lim
    Westminster, CA · Member since 2017 · 4 posts · 2 votes
    9y

    As a new investor, reading this entire thread has got me feeling a bit worried about not recognizing the scam when I see it. Can someone else provide an example email or details on what stood out so we know how to recognize the scams and avoid them?

    Is it possible that the title/escrow company being used is fake entirely or is it that the title/escrow company's email is hacked and the thief is sending an email with fake wire instructions?

    1Reply
  • Mahmoud Tellou
    New to Real Estate · Markham, ON · Member since 2017 · 17 posts · 4 votes
    9y

    @Michael Lim There are several methods hackers can disguise themselves and trick you into making a payment into a wrong account. This is a very complex domain and I am in no position to give legal/professional advice on it, but some of the methods I've come across personally or through awareness e-mails I received from my employer could be:

    1. The hacker sends you an identical email address and layout but from a different domain. For example, you could be dealing with ABC Escrow and their legitimate email is closing @ abcescrow . com however the hacker will use a fake domain such as abcescrows . com (notice the additional S) to fool you into thinking its the legitimate one. You have to pay close attention that you are receiving an e-mail from the real company.

    2. They could have hacked the escrow companies email without the company knowing and sending out emails from the legitimate domain but with the fake transfer information. This is the most dangerous as there is very little evidence of wrongdoing. Your best bet (in all cases) is to verify the transfer details with the escrow company multiple times before executing the transfer. It is also advised to contact them using a number you obtained at the very beginning when you started dealing with them.

    In general, if the company/person you are transferring money to suddenly change their bank account number, email, telephone number it is usually a big red flag that something fishy might be going on. Other things to look for are poorly written emails, weak grammar/language, non professional writing tone, weird sounding domain names, over enthusiastic agents that keep hurrying you into executing the transfer.

    As for the escrow company used being totally fake, it is possible. That is why you should do your homework on which companies you choose to represent you. Look for references from people you trust, or find someone in your area (BP could be useful here) that can recommend a good title company. You should also try to insist that your company of choice is the closing company when both buying and selling. If the other party refuses, check which company they are proposing and do a thorough check on them.

    Unfortunately the risk of cyber crime is very real and can have dire consequences for the victim. Stay aware of whats going on and question every single detail you come across even if you've done the same thing 100 times!

    1Reply
  • Jeff Dimock
    Lender · Norcross, GA · Member since 2015 · 65 posts · 23 votes
    9y

    @Joel Owens - although it is really the title companies that need to better protect their email accounts from getting hacked, your comment about secure passwords is important for everyone.  The sheer number of accounts we have these days makes remembering complex passwords nearly impossible - so they tend to be less complex than they should be.  I switched to a password manager (I use www.roboform.com but there are many out there) so I don't even know my own passwords anymore.  You tell the software how long and how complex (letters, numbers, symbols, cap/lower) you want your password to be, it creates it, and it saves it for your future use.  That way you also don't reuse the same password for multiple accounts, which is also a problem if one account gets hacked.

    1Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Michael Lim , another way to spot a fake email - title company representatives will NOT email you at 2 am.

    At the very beginning of your escrow, contact the title company and get their wire instructions. Pick them up in person if you can. Call them on the phone and verbally confirm the instructions if you receive them by email. Call the phone number you already have, not the one on the wire instructions - unless they are the same.

    Ask the title company if these instructions will change. (They won't) so if you get further emails from anyone, they are fake.

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Michael Lim  it really comes down to personal communications.. I know in this day an age .. everyone hides behind e mail and text.  the phone is your friend in this instance..

    and it can be hard in certain parts of the country like east coast.. where there are all these independent closing attorney 2 and 3 man shops.. unlike say west coast were we have national title companies with 30 employees in one office..

    ounce of presentation will save you a lifetime of pain.. its worth it.. Even today I have a wire going from my PDX bank here in Portland.. to another local title co. OLD REPUBLIC  but I never use them.. and its a quarter million dollar wire.. so I am waiting another 10 minutes and will call their office and speak to my escrow officer personally... they I will ask her something a crook could not answer then.. wire the funds.. take me a few minutes but I know its going to the right spot.

    double check the wire coordinates .. then reconfirm with my bank that they have the right numbers and there you go.

    I can wire from my office but I don't do that.... there are security reasons why I do them in person at the bank..

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  • Nick G.
    Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
    9y

    @Jay Hinrichs @Mindy Jensen @Michael Lim @Joseph M.@Joel Owens

    Wire fraud is becoming rampant, so within C.A.R., we worked alongside authorities to develop the Wire Fraud Advisory. It is not a disclosure, but it is a highly recommended advisory to include in all purchase contracts.

    If anyone you know becomes affected by wire fraud, you can contact me immediately, I have a direct number to one of the lead agents of the FBI's Los Angeles Cyber Division that I can connect you to thanks to my work with him within C.A.R. 

    Time is of the absolute essence in these situations, every single hour is crucial.

    The other action to take is to immediately file a complaint with ic3.gov. The FBI monitors this site constantly, and alongside the phone call we'll make, we can get attention to your situation even faster.

    5Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Nick G.   CA always leads the nation in this stuff.... when is started selling RE in CA in 1975.. we had one page contract with escrow instructions included in the one page.. and a big buyer beware disclosure...

    now I get docs from my CA deals and its 50 pages of disclosures... :)  great work on your end helping to thwart these absolute low life crooks.

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  • Michael Lim
    Westminster, CA · Member since 2017 · 4 posts · 2 votes
    9y

    @Nick G. @Jay Hinrichs @Mindy Jensen @Joseph M. @Joel Owens @Mahmoud Tellou

    Thank you everyone for the great and detailed information! This definitely seems like a great and supportive forum! I look forward to learning more from everyone!

    1Reply
  • Amanda Lawson
    Investor · Roseville, CA · Member since 2016 · 19 posts · 2 votes
    9y

    Wow! Not surprised. Thank you for sharing this info and those of you who shared your experiences.

    0Reply
  • Chad Gaither
    Long Beach, CA · Member since 2016 · 44 posts · 21 votes
    9y
    Thanks for posting @Jay Hinrichs I had no idea this was happening. Will definitely take extra precaution when I go through this for the first time as a total newbie.
    0Reply
  • Jason Monroe
    Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
    9y

    @Jay Hinrichs,  there are so many things wrong with this story 

    1) No Multi Factor authentication ( It's a feature with google apps you just have to turn it on ) 

    2) Poor password discipline 

    3) Your vendor is accepting non encrypted non digitally signed emails :-((  

    There are companies like https://www.mimecast.com/ that are "relatively" easy for business to consume as part of their processes thus providing for secure messaging 

    There are so MANY companies that don't have the proper tooling or processes to enhance security and thus combat fraud. It's sad I try to fight back but it's so hard due to lack of awareness and impetus to change. 

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Chad Gaither   glad we brought this to your attention

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Jason Monroe  anyone who has read my stuff on BP knows I am techno challenged except for piloting an airplane that I can do.. LOL

    But I used to fume when I would get these encrypted e mails could not figure out how to open them etc etc.. started with my bank.. and a few title co... problem is I am sure with most title companies is more people are like me than not and they simply can't figure out how to open encrypted stuff.

    now when U bid on auction . com for instance and you win.. you have to go through a very long complicated process to even open up the documents.. they get info from U from public records and run you through a series of questions.

    IE were does your mom live or lived.. were does your daughter live.. what counties did you own property.. ( this one gets them in trouble since we own in probably 50 different counties LOL)..

    but no more I follow protocol and I no longer get frustrated when they are trying to combat wire fraud.

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  • Jason Monroe
    Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
    9y

    @Joel Owens, @Jay Hinrichs, @Mindy Jensen

    More Mindy, This would be a great blog / show. As Jay called out. He used to resist technology and these various control mechanisms that are put in place to enhance and secure the transaction. Now he has changed his perspective toward these controls. 

    Helping to aide against the risk of wire fraud and the things that investors can do to ensure that they don't conduct themselves in ways that put themselves in harms way would be a great show / blog 

    Perhaps you could do a featured topic to elicit contributors? As a technology professional I have been doing things in a particular way for so long I don't know that I would best volunteer for this topic but maybe could be a technical editor.

    1Reply
  • Dominick DiTucci
    Rental Property Investor · Spring Hill, FL · Member since 2017 · 1 post · 1 vote
    9y
    We've been using FAR/BAR wire fraud disclosures in FL for a few months now. Most of our local title companies are sending paper instructions and we are advising to call title company to verify instructions before sending any money. Unfortunately, once you send the money is gone forever.
    1Reply
  • Nick G.
    Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
    9y

    @Mindy JensenC.A.R. worked with authorities when we wrote the new Wire Fraud Advisory, including the FBI. If you'd ever wanted to do a little PSA on the podcast, I'd be happy to connect you with our FBI contact for an interview.

    Personally, I think it fits right in to the podcast - empowering investors to do business better and smarter, and in this case, protect themselves from losing hundreds of thousands of dollars in a matter of hours. I specialize in risk management and forms within C.A.R., and I can say that is no faster-emerging threat to an investor's livelihood in existence bigger than cyber fraud.

    2Reply
  • Account Closed
    Real Estate Agent · Camarillo, CA · Member since 2017 · 9 posts · 4 votes
    9y

    Scammers are relentless!! Thank you for posting this warning @Jay Hinrichs

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Mindy Jensen@Nick G.  Seems like a special write up or abreiviated pod cast on this subject that Nick is offering would be a very big value add.

    and while we are at it we could do one on FAKE LENDERS as well.. I bet a lot of BP members would rather use the money they lose to fake lenders to pay for a pro account  LOL

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  • David Weintraub
    Lender · Berkeley, CA · Member since 2017 · 1k+ posts · 549 votes
    9y
    We lost $91k 2 months ago. Nightmare dealing with title company in Philly that messed up. First American won't pay the claim, so we're going after title. All they had to do was call the borrower. Nope. They relied on email only.
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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @David Weintraub  can you expound on your 91k incident further.  when you say FATCO won't claim responsibility so your going after title..  Fatco IS title company.. not clear to me.

    Did you wire your loan funding to a title and escrow company who then wired it to the borrower and it turned out that they got hacked ?  or did you get hacked ?

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