The Duarte Chamber and the City of Duarte Public Safety Office has some important information to share with you regarding the protection of your property. Please see the attached letter, which introduces and explains what a Letter of Agency is and how it can be used to help you protect our business. It also provides the form for your use.
Also, we will be having a drop-in meeting at the Chamber office on Thursday, December 5th from 5:30-7:00pm. There is no formal presentation, rather an opportunity to meet with Brian Villalobos, the Director of Public Safety and a representative from LASD to answer any questions you have and to hear what efforts are utilizing to reduce these incidents. The Duarte Chamber and Duarte Public Safety sincerely hopes that you will join us for this meeting on December 5th. Light refreshments will be served. While RSVPs are not mandatory, it would be recommended to ensure we have enough materials for everyone. To RSVP call the Chamber at 626-357-3333. Our address is 1735 Huntington Drive (corner of Huntington and Oak).
One of our members wrote a great article regarding wire fraud. Juliana Tu, Escrow Officer and Owner of Viva Escrow! Inc. wanted to educate everyone of the terrible issue we have with wire fraud, particularly in the escrow settlement industry/ real estate transactions where millions of dollars are transferred daily. So grab a cup of coffee or tea, and learn about this very real issue.
Who Took My Money???
A Grim View of Wire Fraud in the Real Estate Industry
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
2019 President, California Escrow Association
Why drive to a local bank, put on a mask and rob the tellers out of a couple thousand dollars when you can sit in your home in front of the computer, and rob consumers out of hundreds of thousands of dollars? You don’t even have to get dressed!
Perhaps this is not quite a true portrayal of a bank robber or a computer hacker, but the true story is that fraud, and in particular fraud perpetuated through hacking of the consumer or business computer systems has been the main topic of concern ever since 2016. It is a serious concern that threatens vulnerable real estate transactions. The thief does not even have to be near the location where the fraud will be perpetuated. They can, in fact, be on the other side of the world.
Let’s look at a synopsis of when funds go in and out in a real estate sale/purchase transaction. Due to time sensitivity of the contracts signed and conditions to be performed, there are many opportunities when a hacker can get his hands on the money and disappear before the theft is caught:
What is the most popular method of communication today? E-mail. And here is where the savvy hacker steps in. All it takes is for a knowledgeable hacker to scout real estate agents (look, there is a For Sale sign with a company name!) or Yelp “escrow” or “title agents” and seek a way to hack into their email address. If these targets are not using a secured email address, they leave themselves open to someone taking it over.
The hacker doesn’t make their presence known but monitors the emails until they see the communications which indicate a transaction is in progress. Then it is a matter of stepping in by either (1) using a fake email address that looks extremely similar to the real estate agent’s or the escrow officer’s address, or (2) spoof their emails completely and impersonate them. An email is then sent with fake wire instructions asking for the transmission of funds. If the unsuspecting client takes those instructions without verifying with a phone call and wires out the funds, then, unless stopped immediately, the funds will be irretrievable and transferred all over the world within minutes.
Here is a true story of what happened in my office:
On a Friday afternoon before a long weekend our office received a call which gave our escrow officer a great deal of concern. The Buyer of a transaction wired $72,000 to us, the funds, she said, that we requested to close her escrow. Confused, our escrow officer researched the file and advised the Buyer that her transaction was not ready for closing funds yet and we never gave her instructions to wire the funds.
Within a few minutes the story came out: The Buyer received an email request from her real estate agent which had a wire instruction attached. Upon receipt and without checking with us first the Buyer wired the $72,000 requested. The instruction was printed on simple letter paper with our escrow company’s name in block letters but without our logo or address. They were asked to wire to “Juan’s Grizzly, Inc.” (seriously) at a certain bank and account number. The clients went to their bank to send the wire first, then called us after they got home.
Where did the fake instructions come from? The instructions were in an email that supposedly came from the real estate agent. The email address was correct, but on further contact the agent came to the realization that her email had been hacked and her transaction emails were intercepted without her ever having seen them. The fake email was sent from her email account by someone else. Isn’t that scary?
Within minutes after tracing the chain of events we immediately told the Buyers that they must call their own bank, the recipient bank and the FBI Internet Crime Complaint Center (IC3) to report the possible loss. We could not do the reporting as we were not the ones with the potential claim. By the time the calls were made, her funds were already en route to the hacker’s bank.
The Buyers spent the whole long weekend in a state of panic. On Tuesday they were notified by their own bank that the recipient bank refused to take in the wired funds because the account name on the incoming wire did not match the name on the account. Although they sent the money to the bank and account number on the fake instructions the Buyers at least had the presence of mind to put our escrow company’s name as the payee and not “Juan’s Grizzly, Inc”. Thank goodness there is a Fairy Godmother watching!
Thankfully the Buyer got their money back but it was a very close call. Consumers do not realize that banks do not have the obligation to check or match the name of the payee to the name of the actual account. All they check is that they have the account number in the bank.
The real agent was told to immediately change her email address and have her computer scrubbed. How she picked up the hacker was unknown but the National Association of Realtors® as well as the California Association of Realtors® acknowledge that the practice of using public email servers like Yahoo, Gmail, Hotmail, AOL, etc. make the real estate agents very susceptible targets for hackers.
Thankfully, this story had a happy ending, but unfortunately there are many other ones that do not. Until all consumers are educated, and perhaps Congress passes bills that will force the banking industry to take on more responsibility for their part in preventing wire fraud, there will always be those unsuspecting victims who lose their life savings because they are insufficiently aware of the fraudsters spying behind their shoulders.
There are questions to ask. First and foremost, what can be done to protect the integrity of the transaction and the funds? Here are some steps that we recommend to our real estate agents and clients:
Let me summarize: What are the Best Practices consumers and real estate agents should practice?
For the Consumer:
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
2019 President, California Escrow Association
As you know by now, the State of California is known for making regulations based on numerous factors that have a direct effect on our pocketbooks (such as gas taxes, minimum wage, etc.). Recently there have been many discussions in our town about surcharges that consumers are charged. While we represent businesses, we also have quite a few resident members as well. Keeping that in mind, I just wanted to give you a little bit of information to hopefully give you a better picture of what businesses are faced with and the decisions they must make. This information affects businesses statewide, not just here in Duarte. Some cities and/or counties have even more obligations than ours.
Additional costs of doing business that have dramatically increased include:
The trends of additional costs being transferred to consumers can be handled in different ways depending on the company. Some examples of how they can appear are:
The use of credit cards costs businesses anywhere from 2% to 4% (or higher) of your bill for every purchase made. It is almost always tied to how you made your payment as well. Swiping, chips, keying, paying online, or phoning in your payment. All these options have different rates depending on what system the business has signed up for.
As you can see, business costs are going up considerably from multiple directions. No matter how much a company or individual appreciates your business, they need to be able to sustain themselves and be a responsible business operator for the community.
It is incumbent upon us as consumers to make sure we look before we make a purchase. Almost always, the business has notified us by displaying signs, postings around businesses, on menus or price sheets, websites, and on advertising or promotional materials.
On behalf of our Chamber business members, we thank you for patronizing our businesses. It helps keep our tax dollars here in town, supports employment, stabilizes our community and spurs economic growth in Duarte.
If you have any questions, please reach out to us. We’ll be happy to help.
Senator Anthony Portantino continues to be a champion for small businesses. See the below press release for more information. Thank you Senator Portantino!
Sacramento, California – Today [May 1, 2019], SB 349 passed the Senate Governance & Finance Committee. SB 349 authored by State Senator Anthony J. Portantino (D–La Cañada Flintridge) and co-authored by Assemblymember James Ramos (D- Highland) modifies the minimum franchise tax on small businesses and creates a tax structure to encourage entrepreneurship in California.
SB 349 is an attempt to help small businesses succeed and encourage investment growth while also respecting protections with LLCs (Limited Liability Corporations). The bill creates a fee structure based on a small businesses annual gross receipt to replace the flat $800 flat minimum tax mandate. This will help foster growth of small businesses and encourages entrepreneurship.
“Since my time in the Assembly, I have tried to find ways to support small businesses in California and I am very happy that this bill is moving forward. By eliminating the minimum tax responsibility, California will send a strong message of support to small business owners. Small businesses are an ever-increasing important component of a successful economy and we need to encourage their success,” commented Senator Portantino.
California’s small businesses account for a significant portion of the state’s employers and about 45% of our state’s exports. SB 349 is sponsored by the California Small Business Roundtable and seeks to bring some economic fairness into the small business tax structure.
“I want to thank Senator Portantino for authoring this important bill for California Small Businesses. SB 349 will give fairness based on size and further incentives, which will encourage all small businesses to incorporate. This bill will help produce more revenue for the State of California and we are glad this bill is moving forward in the legislature,” commented Betty Jo Toccoli, President of the California Small Business Association
Attention members! One of your fellow members, Walmart, is giving businesses an opportunity to have their products be sold nationally, through Walmart and Sam's Club stores. Information on this "open call" is available on their website (http://walmart-jump.com/). Also see the attached release from Walmart. Here's hoping to see you on their shelves!
We love our library - and rightfully so. So can you take a moment and help them out? The National Medal is the nation’s highest honor given to museums and libraries for service to their communities. For 25 years, the award has celebrated institutions that demonstrate extraordinary and innovative approaches to public service and are making a difference for individuals, families, and communities. Read below for more info:
The Institute of Museum and Library Services—the federal agency that provides library and museum grants, policy development, and research—announced this morning that LA County Library is among its 30 National Medal Finalists for 2019, and one of 15 libraries. This is the Library’s second year in a row being nominated. LA County is one of three California institutions to have been selected as a 2019 finalist, and the only California library system.
IMLS will feature LA County Library on their Facebook and Twitter pages on March 15, and we encourage you to share how LA County Library has impacted your life. To participate you can visit the IMLS social media pages (see links above) on March 15 and comment on their post, or you can post anytime between now and April 22 on your own timeline. We ask that you include #IMLSmedals and tag them @LACountyLibrary.
It is a great honor to receive the award, which is a testament of the hard work done by the entire LA County Library team. I would like to take this time to express my appreciation to all of you for your support of LA County Library as they continue to remove barriers and improve lives.
Our fellow chamber partner, the Pasadena Chamber, has a great opportunity they want to share with our members.
The JPL Small Business Programs Office along with the City of Pasadena and the Pasadena Chamber of Commerce is proud to host the Small Business Opportunity Fair. This event focuses on helping the small businesses throughout the country highlight their products and/or services to the large business and government communities.
It is an all day event held on April 2nd in Pasadena. Please click on the link below to get more information and to register!
This last week, Southern California Gas Company presented "A Balanced Energy Approach that Can Work for Everyone - Making California's future renewable." This is something we have been following for a while and makes sense given the state's desire to be all electric construction by 2020 (businesses) and 2030 (residences). To see a pdf of the PowerPoint presentation, just click the link below. Also is a press release regarding their request for the CPUC to have renewal natural gas to their customers.
The Southern California Regional Rail Authority (SCRRA) is preparing an RFP to obtain a single firm that will operate and maintain the SCRRA rail system, called Metrolink. The selected firm will be responsible for operation and maintenance of the entire Metrolink fleet, maintenance of facilities, material acquisition and management, and other functions associated with operating and maintaining the nation’s third largest commuter rail system.
The DBE goal for the project has not yet been established but will be included in the final RFP.
If this sounds like something you would like to consider, please visit SCRRA's website at: https://www.metrolinktrains.com/bigrfp
Our partner SCE is offering a new Direct Install program. If the customer qualifies and if the vendor is in the area, they may be able to change out lighting to LED for free. There is no guarantee, but it is still a good program if it could be achieved. From what we understand, the vendor likes office buildings with low ceilings, and they would need to be small business customers. If you are interested, see the attached pdf and contact Joyce Lui from SCE. Her contact information is:
Account Manager, Business Customer Division