National news has recently reported that cyber–crooks have been hacking into investors' email accounts and submitting orders to financial advisors with instructions to wire transfer funds into the crook's bank account. The email addresses match the records the advisors have on file for their client, so some do not even question the email. This crime has now crept its way into our industry. Read on to find out more.

The transaction was the sale of a REO property. The property and selling agent were located in a different county than the escrow office. Everyone was working together to ensure the transaction could close on time.

As the closing date drew closer, escrow asked the selling agent to have her broker send over commission disbursement instructions. The agent resisted at first, since she was from a small community not accustomed to having to obtain this from the broker. Eventually, the instructions came over directing escrow to send a check for the total commission to the brokerage.

A couple of days later escrow received an email from the selling agent, Kathy Smith. The body of the email said:

A red flag immediately popped up since the account name did not match the real estate agent's name and the bank was not local. Patricia Nuttbrock, CEO and branch manager of Fidelity National Title, contacted the designated broker to find out if she authorized the commission to be paid to the agent directly. It is a good thing she did.

The selling broker did not know anything about the agent wanting her commission wired to her directly, nor had she authorized it. She contacted Kathy to find out what was going on. Kathy did not have any idea what her broker was referring to. The agent called the escrow officer to inquire further about the email she received. The agent was shocked. The email address was correct, but Kathy never sent it. To make matters worse the wire instructions were not for her bank account. It appeared a cyber–crook had hacked into her email account.

Real estate commissions belong to the brokerage. Therefore, commission disbursement instructions must come from the designated broker of the brokerage firm. Fortunately Patricia knows this. Although there were other obvious red flags, she knew in order to pay the agent directly from her escrow she would need the written authorization from the designated broker.

It is because of her adherence to basic escrow procedures and the phone call to the broker the commission was not wired to a crook. For her efforts and alerting us to this latest scam, Patricia has earned a $1,000 reward for stopping these cyber–crooks dead in their tracks. Great job, Patricia!