As transactions get more and more reliant on the digital world, new methods of crime are springing up. Wire Fraud has become more common than ever before and the scams that hook brokers into the difficulties are constantly changing. Wire fraud has been around for hundreds of years. In 1872, a law was passed by the 42nd Congress to make it unlawful to use the mail system to defraud another and in 1952, a further law was passed stating “[w]however, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”
The scams that had been committed by mail in the 1800s had moved on to the telephone wires and as time passed, onto electronic mail.
Modern wire fraud is subtle and oftentimes abuses the excitement of new buyers. On closing day, the Buyer may receive an email from agent@bbank.com with the tagline “URGENT: New Instructions for Closing Funds.” The Buyer doesn’t notice that agent@bbank.com is not the same as the usual agent@bank.com and cracks open the email, then follows the instructions to wire the money to the fraudster’s account. It’s very difficult to undo a wire transfer, so oftentimes the scammer succeeds. Depending on how sophisticated the scammer is, they may create fake profile accounts that use your agent’s picture, they may shop the emails to look like they come from the agent, and may even have a copy of the agent’s signature line.
Form 10.5 is the Oregon REALTORS® Form library version of the Wire Fraud Advisory. There is a repeat of the wire fraud information in the Buyer and Seller Advisories [Form 10.1 and Form 10.2]. The advisory cautions the client to stay vigilant for irregular or sudden changes, advises that the client verify communications with the broker, warns against relying solely on electronic communications, and gives strict warnings about sending confidential information on unsecure systems. Brokers should always give a copy of the Buyer or Seller Advisory to their client, and if the broker is particularly concerned or believes the client needs additional emphasis, Form 10.5 should be given to the client.