Over the last year, there has been an alarming rise in the number of fraudulent wire requests. Wire Fraud schemes can be very convincing and have the potential to be devastating for all parties involved in the process; billions of dollars are lost each year to real estate scams.
Wire fraud generally looks like this: a scammer gains access to the email of a participant in the transaction, usually the REALTOR®, attorney, or lender. They then forge a phishing email with personal details to make their message appear to be authentic. The scammer monitors the transaction and at the time of the disbursement of funds, they send an email to the buyer with instructions to wire their closing costs to a fake account. Once the money has been deposited into the scammer’s account, it is very difficult to get the money back!
Steps to Identify and Avoid Wire Fraud
Know Your Closing Process
Talk to your agent and/or attorney in person to discuss the closing process. You should ask about valid payment options and talk to your lender directly about how you should wire your money during the closing.
Write Down Contact Information
You want to have a hard copy of the contact information for your real estate agent, lender, and attorney. You want to write down their names, phone numbers, email addresses, and any other information that may help to contact and identify them if the need arises.
Before you send money to any third party during the closing, consult your original home paperwork and look for the original phone numbers and email addresses.
Be Careful of Last Minute Closing Changes
Lenders and attorneys have systems in place to make the closing process as smooth as possible; you should receive wiring instructions weeks prior to closing. Real “last-minute wiring change” rarely happens at all. Scammers will try to scare you with short timelines and messages to send money immediately. NEVER follow instructions that are emailed to you regarding the wiring of escrow or closing funds.
Call to Confirm Wiring Instructions
If you do receive an email with wiring instructions, consult your hard copy of contact information and call your agent and attorney to verify that they sent the instructions in the email. You should ALWAYS reach out to your attorney and real estate agent prior to wiring any funds.
Don’t Email Your Financial Information
Email is not a secure form of communication; especially when it comes to finances. Don’t even send it to someone you trust, you never know when your email or theirs will be hacked. It’s best practice to meet in person when sharing important financial information.
You’re Being Scammed. Now What?
If you have already wired your money and you believe that you are being scammed, reach out to your bank immediately and request a wire recall immediately. If you act fast enough, you may be able to get your money back.
Whether you get your money back or not, you should also reach out and file a report to the FBI. They may be able to help you recover your lost funds and catch the scammers who stole it from you, which in turn, helps protect others from the same wire fraud scheme.
It is better to be over-cautious during the closing process than out of funds and your deal falling through. If you have any other questions about the home buying process, reach out to one of our outstanding agents!
If you’re looking to buy a home in the Upstate area, view all current listings here.
