An excited prospective renter puts down $3,000 as a security deposit toward the perfect apartment. The money vanishes. The rental deposit has been stolen by a scammer. An elderly couple secures a reverse mortgage on their longtime home, so they can pay their living and medical expenses. The cash never arrives, and they lose their home and a lifetime of equity. A home sells and escrow is about to close. The buyer wires money, but the deal is a fraud, and the payment lands in a con artist’s account and is never seen again. The list of cons goes on and on, said Detective Lyle Barnes of the commercial crimes division of the Los Angeles Police Department. “People lose their homes, lose their money,” he said. “Everyone is being hit: title, escrow, buyers, sellers, agents.” Detective Barnes spoke at a recent meeting of local brokers and real estate company owners organized by the Southland Regional Association of Realtors’ risk management committee.. “I recommend everybody look at cyber insurance to protect yourself,” said Steven D. Spile, the committee’s chairman. “What I heard here today scared the bejesus out of me, and I’m an attorney.” From payment of upfront fees for a promised loan modification (which is illegal) to creation of phony “straw buyers,” real estate fraud is “very lucrative for criminal enterprises,” Barnes said. “It’s a big business” that ensnares people of all races, sexes, and income groups, Barnes said. “It’s all about the money.” Criminals use an accomplice called a “bird dog” to find property along with the perfect marks, preferably elderly owners who owe little or nothing on their home. They convince the owner to sign a document that purports to be a fantastic deal. It could be a reverse mortgage, loan modification, or equity line of credit. Instead, the criminal takes ownership of the property and resells it before the wronged owner can find out. Local owners last year were hit hard by escrow thefts, some of whom remain active, Barnes said. Thieves hijack an agent’s or escrow company’s email account, learn when an escrow is about to close, then send a seemingly authentic email to the seller with a last-minute change of wiring instructions. They give a new bank account number where hundreds of thousands of dollars from the sale should be sent. If not discovered and recovered within 72 hours, typically the money is gone, Barnes said. “Don’t trust emails that request you send money to a different account,” he said. “Treat it suspiciously. Confirm a wire change order with a phone call.” If you are hit, file for bankruptcy immediately. Bankruptcy! That’s how bad things can get, raising the specter of losing everything. Beware! Anyone who believes their email has been hacked should take the following steps: • Immediately change all user names and passwords that may have been compromised. • Contact any clients or other parties who may have been exposed during the attack so that they can take appropriate action. Remind them not to comply with any requests from an unverified source. • Contact local police. Report fraudulent activity to the Federal Bureau of Investigations’ Internet Crime Complaint Center. Learn more at http://www.fbi.gov/scams-safety/e-scams • Realtors should report any fraudulent activity to their state and local Realtor association so that the associations can send out alerts or take appropriate action. • Real estate professionals should work with information technology and cybersecurity professionals to ensure that their e-mail accounts, online systems, and business practices are as secure and current as possible. • Anyone with an Internet connection needs to keep their firewall and anti-virus technologies up to date. Also, keep in mind that not all emails are what they appear to be. For example, Realtors need to exercise caution if they receive an email with the subject line reading “NAR: Urgent Update.” The email will look like “[email protected],” but it is not from the National Association of Realtors. The email uses the phrase, “all registered Realtors are hereby advised to view the recent publication released” with a link. Do not click any of the links, which may ask for passwords or compromise a computer’s security. Instead, delete this email. Realtors and members of the public need to be on high alert for email and online fraud. For more information on cyberscams and cybersecurity best practices, visit Realtor.org to access these topics and resources: • Wire fraudsters targeting real estate transactions • Protecting your business and your clients from cyberfraud • Request to redirect funds should trigger caution • Data privacy and security • Risk management • Internet security best practices • Realtor safety articles Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the 9,600-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.