Technology, so it seems, makes our lives easier, but it comes with a downside.
Money wire fraud scams have become prevalent in real estate. Scammers have stolen home buyers’ down payments and closing costs. It is a concern to both the National Association of Realtors® and the Federal Trade Commission who want to alert consumers to this scam.
Courtesy of Linda Mill, Fidelity National Title Company - website lindamill.com
How the scam works
Scammers hack into real estate, professionals email accounts to gather home buyers’ email addresses. They then send out official-looking emails from either the real estate agent, or from the escrow company, to home buyers with wire instructions. Not suspecting anything wrong, home buyers then wire funds to the bank account specified in the email.
Unfortunately, the home buyers’ funds do not end up where they should go. When a home buyer wires money from their bank account, it is impossible to get it back. The only way to get the money back is for the recipient to send it back. But the purpose of the scammer is to catch those funds and then disappear.
Once it’s gone, it’s gone
Real estate agents rarely collect money in a real estate transaction and are not aware of wire instructions given by an escrow or title company to home buyers.
There are two ways a home buyer can deliver their funds to escrow:
- By a money wire transfer; or
- By a cashier’s check
Both methods need a home buyer to appear in person at their bank. Cashier’s checks are old school and have to be hand delivered. Some home buyers prefer to take their cashier’s checks themselves. Others prefer the ease of a wire transfer and not having to make that stop.
Wire Transfers are Easier and Faster
But home buyers should be cautious. They should not trust an email with wire transfer instructions sent from their real estate agent, escrow or title company without first verifying by telephone. A phone number in an email with wire transfer instructions may be the wrong number.
A real estate agent would not have wire transfer instructions. A home buyer can ask their real estate agent to get the wire instructions for them. But it is better if they talk directly with someone at their escrow office.
The escrow company’s phone number can be found in the purchase contract or in the closing package sent by regular mail by the escrow company.
Don’t be scammed by a money wire fraud when you are buying a home!
See related, Federal Trade Commission’s, “Scammers phish for mortgage closing costs”