Gone in 60 Seconds

Susan is about to close on her first home. She’s getting emails about a tree the sellers agreed to trim, new instructions on how to transfer the down payment, a new date for the closing meeting, and bids from contractors for the kitchen remodel she’s going to do before moving in.

Fast-forward a few days. Susan’s real estate agent arrives at the title company to close on Susan’s new house  — only the title company informs her agent that the down payment was never transferred. Susan’s agent immediately calls her. Susan insists she sent the down payment. The money even came out of her account! 

When Susan arrives at the title office and shows her agent the email she received with instructions, her agent realizes Susan is the victim of a scam. The title company didn’t send Susan the email with new instructions. Scammers did. The email looked like all the other emails Susan had received. The display name for the email was “Alice – Title State.” Title State is the name of Susan’s title company, and Alice is the name of her contact. The email is even formatted the same as previous emails and had the same logo and signature. Susan is the victim of wire fraud.

Wire fraud is on the rise. In 2019 the Internet Crime Complaint Center (IC3) recorded 467,361 complaints of wire fraud, and the FBI says only 15% of wire fraud cases are reported. Wire fraud has cost businesses and individuals $36 billion since 2016.

Email spoofing is a significant contributor to the rise in wire fraud. Email spoofing is the creation of a message designed to trick the recipient into believing the sender is someone other than the actual source. In cases related to home buyers, the fraudulent email then entices the victim to transfer money to the sender. 

Take these steps to protect yourself from wire fraud:

1. Verify every transfer request. Every time you receive a request to transfer money, call the title company and confirm the instructions by phone. Specifically, confirm the account number and destination information. Never transfer money until you have verbal confirmation that the request is legitimate.

2. You should always initiate the call. Do not accept a call from the company as a verification. Some scammers will call victims pretending to be the title company. If someone calls you attempting to confirm the request, say you will call back. Hang up and dial the number for your title company. 

3. Verify any changes to instructions. Even if you have already confirmed that a transfer request is accurate, verify any additional updates. If you receive an email or phone call with even the smallest change to your instructions, call the title company and verify the change by phone.

4. Always verify directly with the title company. Real estate agents and lenders are experts in their fields, but when it comes to confirming wire transfers, always speak directly with the title company.