Can a Fraud Wire Transfer be Reversed?

As a real estate professional, you likely have plenty of experience with wire transfers. Commonly used for earnest money deposits, down payments, closing costs, and other payments related to a real estate transaction, wire transfers are quicker and safer than a check.

Unfortunately, they also offer a false sense of security — wire transfer fraud is a favorite scam of hackers targeting the real estate industry. And if it happens to you, you’ll want to know, “Can a fraud wire transfer be reversed?”

What is a fraud wire transfer?

In a real estate transaction, a fraudulent wire transfer occurs when a scammer, posing as another real estate professional such as the seller’s agent or the title company, contacts you or the buyer. The scammer sends instructions for wiring funds for closing costs or an earnest money deposit. However, the scammer instructs the buyer to send the money to a fraudulent account — in actuality, an account that will deliver the funds straight into the scammer’s pocket.

You might think that you’d be too clever to fall for such a scheme, by today’s scammers, cybercriminals, and hackers are incredibly sophisticated and quite adept at imitating another real estate professional by using their credentials and information. In fact, mortgage fraud wire transfer attempts have risen significantly over the years, costing both consumers and real estate professionals over $1 billion each year.

What Happens if You’ve Been Scammed?

The real question is, “Can a fraud wire transfer be reversed?” The short answer is no, but that doesn’t mean it isn’t worth a try. On rare occasions, if you act fast enough, you can prevent the fraud wire transfer from going through, or even reverse if it is in the bank’s power to do so.

So the first step to take is to contact your bank immediately and request a wire recall. There is, unfortunately, a very low probability that a reversal will be successful. Banks usually can only reverse a wire transfer in certain situations, such as if a duplicate wire transfer was performed by accident or the bank made an error and used the wrong account number.

But if you made the mistake or provided incorrect information, there may likely be very little recourse. This is especially true if the recipient bank has already taken action and the funds have been removed. Chances are the scammer will retrieve the funds as soon as they are received, severely limiting your chances of getting the money back. However, there may be rare cases where the recipient bank will assist in the manner, so it is always worth a try.

Next, file a complaint with the FBI by submitting the information to the FBI’s Internet Crime Complaint Center, which also covers fraud wire transfers.

How to Prevent a Fraud Wire Transfer

Of course, instead of asking can a fraud wire transfer be reversed, it might be more prudent to ask how you can prevent one from occurring in the first place. As a real estate professional, it is your duty to be on the lookout for red flags when dealing with any and all individuals that are part of a real estate transaction. Additionally, there are measures you should take on a regular basis to minimize the risk and ensure security throughout the entire mortgage process.

Write Down Contact Information

You should keep a written log of all contact information related to the parties involved in a real estate transaction. Not just the buyer or the seller, but also the title company, closing attorneys, escrow agents, etc. Whenever you receive communication from someone, check the contact information against what you have written to be sure it is the same. Scammers will often use phone numbers or emails that are similar, but you can spot the difference and detect a scammer at play if you are aware.

Be Wary of Any Changes Related to the Closing

If you or the buyer receives instructions that are different from what was already discussed, it could be a red flag. This is especially true if the person providing the instructions is doing so with a sense of urgency. Scammers will often try to induce stress and confusion to cause their victims to act without much time to think.

Avoid discussing as much as you can regarding the closing process via email. Cybercriminals and hackers that manage to access your email can discover a wealth of information and use it to perpetuate all types of real estate fraud.

Always call to confirm any instructions and check account numbers for any wire transfers. As an added layer of security and as a deterrent to scammers, use an ACH money transfer system instead of wire transfers.

Use an Electronic Money Transfer Platform

Many real estate professionals have already switched to using an ACH platform instead of money transfers due to the extra security and scrutiny money transfers are subject to when sent through a Clearing House. When using a money transfer system such as paymints.io, which was designed especially for the real estate industry, you can improve security and convenience for all involved in a real estate transaction.

Paymints.io is an advanced money transfer platform that takes the outdated wire transfer model to the next level and makes it easy and convenient for buyers to send funds for earnest money, real estate transaction fees, and closing costs. Real estate professionals can request money for fees instantly. The buyer can also send them instantly and eliminate the need to share banking information over email, which is also a source for hackers and cybercriminals to strike.

Additionally, paymints.io adds bank-level encryption, real-time transfer tracking, and ID verification, ensuring that the money is being sent to the right person instead of a scammer. It’s the ideal means of transferring money in the real estate industry while also providing protection and security for both yourself and your clients.

In Conclusion

Sometimes you just need to trust your gut. If something doesn’t feel right about instructions you’ve received or a trusted individual seems to be talking differently than you are used to, take the time to check everything before proceeding with any money transfers. It’s better to err on the side of caution than to have to ask can a fraud wire transfer be reversed.

Minimize the risk of real estate identity theft with paymints.io. Schedule a free demo today!

 

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