What Is Wire Fraud, and How Can Homebuyers Avoid It?
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Wire fraud occurs when hackers gain access to an escrow or title company’s email account, pose as escrow or title officers, and electronically steal the funds that homebuyers wire to begin or complete their transactions. Wire fraud is one of the fastest growing forms of cybercrime in the United States. According to the Washington Post, in fiscal year 2017, hackers diverted or tried to divert almost $1 billion from real estate purchase transactions into their own accounts. In this article, I’ll talk a little bit about how homebuyers can avoid losing their good faith deposits, down payments, and/or closing funds to wire fraud.
Signs of wire fraud
How do you know if an email you have received from your escrow company is fraudulent? Here are a few signs of suspicious activity:
- The email address is slightly different than the one used in previous communications. For example, it might end in .net instead of .com.
- The email contains poor grammar, incorrectly spelled words, or oddly worded sentences.
- The email requests last-minute changes to wire instructions that your escrow officer previously sent.
How to avoid losing your home settlement funds in a wire fraud
The thought of losing your escrow funds to wire fraud is very scary, but there are some simple steps you can take to protect yourself against wire fraud. First, pay close attention to how instructions are sent. Reputable title and escrow companies will almost always send email through secure and encrypted channels. Second, never send personal information, like your Social Security number, through email. Third, before wiring any funds, call your escrow officer directly to confirm the wire instructions. Fourth, if you receive any requests for last-minute changes to your wire instructions, verify these changes with your escrow offier over the phone or in person. Wire instructions rarely change, so this is a clear red flag.
If you are a victim of wire fraud during your real estate transaction, acting quickly may help you recover some of your funds. The FBI may be able to stop the transfer if the amount is $50,000 or more, if the bank transfer is sent internationally, and if the bank issues a recall notice and the FBI is informed within 72 hours. Call the local FBI field office in your area immediately and visit ic3.gov, the FBI’s Internet complaint center.
Also Read: The Informed Buyer
Also Read: Buyer's Resources
Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage.
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. More about Justin Gramm on Google+. Call Justin at (858) 437-2662 or E-mail.