Wire fraud has turned into a billion-dollar industry for computer hackers.
The FBI reports wire fraud on home purchase transactions is up nearly 5,000% from 2016.
How does wire fraud happen to unsuspecting home buyers?
- Hackers gain access to a title company or real estate agent’s email account, silently watching for upcoming home purchases and then targeting cash down payments or all cash buyers. This also includes home sellers who are buying a new home with the proceeds from their home sale. At some point before closing, the scammer takes on the identity of the title agent with a very similar email address and the same logos and signatures the buyers have seen in other correspondence. They then send the buyer instructions to wire the funds to a fraudulent account.
- Once the money is wired, there is a very tight window of time to reverse the wire, as these fraudulent accounts are usually international and bounce-wire from one account to several others very quickly. Even when the wire has been successfully caught and reversed, it’s likely that not all the funds will make it back to the buyer.
Here’s how to avoid wire fraud theft of your down payment:
Don’t accept wiring instructions for your real estate closing by email. Secure the phone number for the title company or closing attorney that is handling your transaction (from your real estate agent or mortgage lender) and call them directly to secure this information.