Don?t Let Wire Fraud Derail Your Home Purchase

It seems like everyday scammers discover a new way to defraud consumers ? and now homebuyers are their targets. Unfortunately, thousands of homebuyers fall victim to wire fraud schemes every year. Although the escrow process was created to help safeguard your funds during a home purchase, scammers have figured out a way to hijack this process and steal tens of thousands of dollars from unwitting homebuyers. Here?s what you need to know to make sure you don?t become one of their next victims. 

Real estate fraud is on the rise

According to the FBI, real estate fraud is skyrocketing. In their 2018 Internet Crime Report, Americans lost almost $150 million in real estate scams, including wire fraud. Not only that, but the number of scams in the real estate industry has increased by more than 1000 percent since 2015. It?s more important than ever that homebuyers understand how they can be targeted and how to spot a scam before they become a victim.

How real estate wire fraud works

Let?s take a look at what a typical wire fraud scenario would look like. Scammers identify pending home sales using publicly available data. They then determine all the parties involved with the transaction and hack into their email accounts. They closely watch the correspondence between them to determine the best time to act. They will often target a homebuyer a few days before the scheduled closing date by sending an urgent email. This email looks legitimate ? including the email address of the real estate agent and their signature. The email will even address the buyer by name. This message will contain new instructions for delivering the funds for the closing. Instead of bringing a check to the closing, the buyer is instructed to wire the money to their lender immediately to avoid a delay in the closing. Unfortunately, as you can guess, the money is not wired to the lender, it is wired to a fake bank account set up by the scammer. The buyer may not even realize that they were scammed until they talk to their real estate agent a few days later to finalize the closing details.

How to avoid being scammed

Although this is a very sophisticated phishing scam, there are steps you can take to avoid becoming a victim. First, understand the closing process. Talk with your real estate agent over the phone or in person about how the closing process works. Avoid sharing these details over email where scammers may see them. Then decide on a code phrase that all trusted parties would use to confirm their identities in the future as well as a phone number where they can be reached. If you receive wiring instructions via email, don?t click on any links or call any phone numbers listed in the email. Instead, call the agreed-upon phone numbers to verify whether or not the instructions are legitimate. And whatever you do, don?t send sensitive financial information via email.

What to do if you are scammed

It?s important to act quickly as soon as you realize that you have been scammed. Contact your bank or the wire service and let them know the receiving party is a scammer. Ask for a wire recall. You?re more likely to get your money back if you act fast. You should also contact the FBI at https://www.ic3.gov/default.aspx to report the scam.

Contact Agent Inc. today

Buying or selling a home can be complicated and confusing, so it helps to work with a team of professionals who have years of experience behind them. Contact Agent Inc. Aujourd'hui à 949-791-8160 ou [email protected]. We?re happy to answer all your questions and we take pride in safely navigating all our clients through the real estate process from start to finish.