Unfortunately, wire fraud is common in the world of real estate transactions. Criminals pose as title companies, attorneys, lenders, real estate agents, property managers, sellers, buyers, and anyone else involved in real estate transactions. Some of these criminals are sophisticated and are knowledgeable about real estate transactions. Victims are often not experienced with real estate transactions or sending wires.
Some tips to avoid wire fraud include:
Do not trust changes to wire instructions – If you wired your escrow money to the title company and then you receive an email asking for more money to be sent to a different bank with different wire instructions, then that is a major red flag. This seems to be the most common way I see victims get tricked into sending a wire to a fraudster. If you receive a request to send a wire to a different account, then forward it to the title company. Speak with a manager at the title company over the phone or preferably in person about any supposed changes to wire instructions.
New contact information – If you receive an email from a title company, attorney, or any other party related to the transaction where they provide you new contact information, this is a red flag. If you receive such an email, contact the party directly and have them verify whether they changed their contact information.
Different email address – When receiving wire instructions, check the email address that sent them. Is the person who sent them someone you spoke with before? Is the exact same email address being used to provide you the wire instructions? I have seen fraudsters create new emails using the name of someone at the title company or attorney’s office with a Comcast, Gmail, Yahoo, or other generic email provider. Review the email address of the sender closely to confirm it is the exact same email address that the person has always been using to communicate with you.
Poor grammar – If you receive an email that has incorrect punctuation, misspelled words, incorrect formatting, capitalization errors etc., then this is a red flag for fraud. Fraudsters are often foreign and have poor command of the English language.
Verify wire instructions – Always verify wire instructions prior to initiating a wire. Most title companies or attorney’s offices will require that you verify wire instructions prior to a wire being initiated. Even if they do not require this, you should call them to verify wire instructions prior to sending a wire.
Send wire from your bank – You can go to your bank in-person with the wire instructions and have your bank send the wire. Explain to your bank why you are sending the wire and ask the bank to help you take steps to avoid wire fraud. Your bank should be experienced with wire fraud and will likely take extra steps to avoid it.
Foreign bank – Wire instructions from a title company or attorney’s office closing your real estate transaction in the U.S. should not have a foreign bank account. If you receive wire instructions for your real estate closing that have a foreign bank, then the wire instructions are likely fraudulent.
Urgency – If you receive an email that is marked as rush or urgent, then this is a red flag. Fraudsters often try to create a sense of urgency since having you act quickly will make it more likely for you to make a mistake and not catch on to their fraud.
Overall, there are many different red flags you can look for to prevent wire fraud. It is important to be aware of the red flags and be very careful with sending wires. If you feel uncomfortable sending a wire, then go to your bank to have them help you send it. And always call the title company or attorney’s office to confirm wire instructions before sending a wire.