The Ohio Good Funds Law was updated in 2017 and changes the way money is exchanged during the closing of a home. While there are several facets to the new law, it basically disallows the use of any type of check in a residential real estate transaction for any amount over $1,000 (with a few exceptions). Remaining funds typically must be wired from the buyer’s financial institution to an escrow account of the title company handling the closing. While this law protects consumers from check fraud, it opens up greater risk for wire fraud. There are several basic rules you need to know to protect your funds during a wired transaction. You don’t ever want to be in a position where hundreds of thousands of dollars have been wired to the wrong account! The chances of getting back this money are quite slim.
Theft by wire fraud is real. When you’re involved in the closing of buying or selling a home, beware that:
• Criminal hackers are on the rise and target the email accounts of anyone involved in a real estate transaction— buyers, sellers, title agents, lawyers, mortgage brokers, and real estate agents. Their scheme is to pose as someone official in the closing process and provide account information that diverts funds from the proper place to an account owned by the criminal party.
• Wire fraud criminals often send emails that look like they are legitimately from the proper party involved in your closing. They typically give instructions with which you may naturally feel compelled to comply. Don’t automatically assume that such emails are legitimate.
• To avoid being a victim of wire fraud, it’s highly recommended that none of the parties involved in the transaction put any personal financial information in an email, whether as email text or as an attachment.
• Protect your social security numbers, bank account numbers, credit card numbers, and other sensitive information. Rather than sharing these in email, submit only in one of the following ways: by phone to a number of the company or institution that you know and trust, in person, or by secure mail to an address that you know is legitimate.
• Before you wire any funds to any party (such as a lawyer, title agent, lender, or real estate brokerage), personally call that party and speak to the person you know to confirm that the wiring instructions are legitimate. Confirm ABA routing number, SWIFT code, and credit account number.
• Contact other parties involved in the transaction using telephone numbers that you have obtained on your own. Do not use a phone number or email address from an email you obtained about the transaction as either of these could be fraudulent.
Because of the high risk of wire fraud, many real estate agents are asking their clients to sign wire fraud notices that leave Realtors® out of the coordination part of the wire funding process. Such notices are designed to help protect you and may contain language such as “If you receive wiring instructions or a request for such instructions from what appears to be my email, don’t respond. It’s not from me. I will never send, request, convey, or transmit any wiring instructions from or to you.” Typically wire instructions are handled by title agents, lawyers, and lenders, so it’s not necessary for your real estate agent to be a part of this process. If there’s any exception in your case, speak in person with your agent about it.
Heed the wire fraud warnings and practice vigilance at all times throughout the weeks leading up to your closing. With large sums of money being transferred, it’s worth the extra steps to remain secure.