By Kara McGregor, Independence Title
Imagine this scenario … you’re finally buying your dream home, and have saved up a large down-payment. You’ve made it through the obstacle course of loan approvals, negotiations and home inspections. You’ve worked through the logistics of planning a move involving kids, pets, and a lifetime accumulation of stuff. Your closing is a few days away.
Then, you get an email from your REALTOR, title company, or loan officer (with standard logo and signature) that says the following:
“Congratulations, you’re almost there! Attached are your wiring instructions for transfer of funds. Please make sure to initiate the wire a few days ahead of your closing. As you may know, instances of wire fraud are becoming more common, so please call your escrow officer Sarah at (512) XXX-XXXX and confirm these instructions before sending your funds. Please don’t hesitate to get in touch with any questions.”
You call the number and talk to someone who answers the phone as “Sarah with Brand X Title,” and she confirms the wiring instructions. You head to the bank with confidence. And you send all your funds to an account belonging to a cyber-criminal who has been monitoring your email exchanges for weeks, waiting for the right moment to step in and hijack your money. Your funds are gone, you can’t buy the house (which has to go back on the market), and everything you have left is in a moving truck.
Don’t underestimate how common this scenario has become. Title companies in our market area alone are seeing dozens of wire fraud attempts each month. When funds are misdirected, victims have to act fast. The only recourse is to contact the bank immediately to see if the wire can be stopped or returned, and to contact the FBI.
All parties to real estate transactions need to be aware of this threat and discuss precautions. Here are two suggestions:
The best protection at this time is to bring funds to closing via cashier’s check. Online security systems currently lag behind cyber fraud schemes, and the old-school paper cashier’s check is one way to keep your money safe as you complete your purchase.
If a wire is the only option, follow strict protocols about verifying wiring instructions exactly. Do not ever confirm an instruction from a phone number given in an e-mail, regardless of how bona-fide the email appears to be. Pick up the phone and call your escrow officer using a number from the company’s website, and confirm instructions. Never act from e-mailed instructions without an independent verification.
Talk to the closing team at your title company about specific best practices. And visit IndependenceTitle.com (search “wire fraud”) for some great resources to help you protect your transactions. You’ll see details on options for bringing funds to closing, common wire fraud scenarios, and tips on what to do if your money is hijacked. RL