Real estate wire fraud has become one of the most prevalent cybercrimes in the U.S. According to FBI data, roughly 13,600 people were victims of wire fraud in 2020 alone, an increase of 17% over the prior year. The most common type of wire fraud involves Business Email Compromise/Email Account Compromise (BEC/EAC), where criminals pose as a title agency, real estate agent, or attorney. Here’s what you need to know about this type of fraud and the steps you can take to keep your money safe when purchasing a home.
What is Wire Fraud in Real Estate?
When real estate wire fraud happens, it’s generally when a scammer impersonates your closing or real estate agent to convince you to send your closing costs to a fraudulent account. This type of fraud relies on a technique called phishing, where hackers use fake phone numbers, websites, or email addresses to impersonate a trusted party.
A scammer will commonly use a phone number or email address that looks like the one your title agency, lender, or real estate agent uses. They will call, text, or send you an authentic-looking message that might contain a lot of personal information. The message will generally tell you that there has been a last-minute change in the closing procedure or apologize for sending you the wrong directions the first time. They’ll give you updated instructions, which will route the money into the scammer’s bank account once wired.
How to Identify and Avoid Real Estate Wire Fraud
You can avoid this common type of real estate fraud by watching out for these common red flags and taking some proactive measures.
Understand Your Closing Process
Confusion about the closing process can open you up to scams. Speak with your real estate agent and title company about what to expect during the closing process. Find out what payment methods are accepted and any deadlines to wire money.
You can also set up a password with your trusted partners to confirm identities when communicating. But avoid sharing this password via email.
Write Down Contact Information
You will want to keep a notebook or some other record of the contact information for all of the parties involved in your real estate transaction. This includes your real estate agent, lender, title company, and attorney. Record each party’s name, phone number, and email address. Avoid sharing this list of partners with anyone you don’t know and trust.
Be Suspicious of Last Minute Changes
If anyone emails or calls you with “last minute” changes to changes to closing instructions, be very suspicious. Scammers like to use panic and confusion to get victims to take actions they would otherwise not take, especially when they think their home purchase could be in jeopardy.
Some scammers are sending out emails saying they are “short-staffed due to COVID-19” and need to make some changes. While this is a possibility, it’s not worth risking your money to trust such a message without verification.
Don’t Give Out Financial Information
If someone calls you (even if their voice sounds familiar) or sends you an email, don’t give out financial information. It’s just too important to take the risk. Particularly with email, hackers can access this information and take advantage of it too quickly. A better option is to stick to in-person meetings whenever possible. And remember, you don’t have to wire any funds for a closing. You always have the option of paying via cashier’s check to ensure the money gets into the right hands.
Call Back to Confirm Any Instructions
Assuming you get an email or phone call with wiring instructions, it’s important to confirm the legitimacy of the information. Check your list of trusted contact numbers or Google the title agency’s number and give them a call back to confirm any changes.
What If You Think You’ve Been Scammed?
If you believe you’ve been the victim of a wire scam, you must act quickly! Contact your wire transfer company or bank immediately and ask them to recall the wire. You may be able to get the money back if you act within 12 hours.
You should also submit a report to the FBI’s internet crime division. Whether you get the money back or not, let the FBI know what happened so that they can investigate and pursue the fraudsters on your behalf.
Partner With a Trusted Title Company
Mortgage wire fraud is a serious issue that can jeopardize your transaction. The bottom line is that you should always confirm your closing details in person and partner with a trusted title company.
United Title Company provides clients with a wide range of residential real estate services, including purchase agreement, escrow, and title services. Contact us today at (410) 544-5441 or reach out to us online to learn more about how we can assist with your upcoming transaction.