Alert: Real Estate Trust Accounts Targeted

Fraudsters are targeting lawyers and real estate licensees disbursing trust funds with a change in payment instructions

Earlier today, the Law Society of BC circulated an email warning lawyers and real estate professionals that if you are about to pay out trust funds and your client’s payment instructions change, stop and check thoroughly to ensure the new instructions are legitimate.

The Law Society has learned that a BC law firm re-directed sales proceeds that it was holding in trust for a real estate client on revised instructions from someone that the firm believed was the client. Before the firm wired the funds to the client, it received an email, purportedly from the client, directing the funds to be wired to a different account. The funds were sent, but apparently never received. In this case, the email address used by the fraudster was identical to that used by the client, except for one letter.

The Law Society has also learned of frauds in the US in which the email accounts of real estate licensees have been infiltrated to send altered wiring instructions.

If you receive any change in payment instructions, consider the possibility that the new instructions may be fraudulent. Take whatever steps are necessary to satisfy yourself that any change in instructions is legitimate, including checking the email address and initiating direct, in-person contact with your client.

This information is provided to you by the Real Estate Council of British Columbia (RECBC).

Your feedback is always welcome and can be sent to info@recbc.ca.