Vivienne, a first time home buyer, was involved in the purchase of a $1.8 million home. The transaction was getting ready to close. She received an email from what appeared to be her settlement agent’s assistant, but in reality the message was generated from a fraudulent email account. The message read as follows:

Vivienne called the number and heard a voice recording saying the escrow officer’s assistant’s name, but the voice sounded foreign and robotic. Vivienne was suspicious the email was not truly originating from her escrow officer’s assistant and that the voice phone number was not truly dialing Chicago Title Company.

Vivienne promptly forwarded the email to her real estate agent. The real estate agent called the escrow officer using a known, trusted number and confirmed the home buyer’s suspicions, the email was fraudulent. Fortunately for all involved the homebuyer did not fall for the scam and the transaction was able to successfully close on time.

How It Works

A scammer typically gains access to a transactional participant’s email account. With access to the real email account, the scammer can observe email exchanges and create fake emails that look authentic, including email signatures and company logos, of various transactional participants. Using these authentic looking email, the scammer is able to impersonate anyone involved in the transaction and send fraudulent wire instructions to the consumer, diverting their money to a fraudster’s account.

5 Warning Signs To Watch For

• Make a decision now!
  Rushing someone to make a financial commitment may be more than an irresponsible business practice — it could be a sign of fraud. A wire transfer of funds should never occur until the consumer has time to verify the bank wire information with trusted resources.
• Change in wire instructions
  Consumers likely are the target of a real estate scam if the settlement agent or title company informs them previous wire transfer instructions were incorrect or changed, and they provide new instructions. Settlement agents and title companies rarely change their bank accounts.
• Discounts for sending a wire transfer
  The processing of a wire transfer costs the sender and recipient, fees and costs. Settlement agents do not offer discounts for consumers depositing their down payment and closing costs via wire transfer.
• Does the message make sense?
  Most fraudsters perpetrating the crime do not speak English as their first language. Their messages contain misuse of grammar, spelling and punctuation. Often times, the message does not make complete sense.
• Account Name = Settlement Agent/Title Company
  The account name on the wire instructions often contains the name of an unknown individual or company, and not the name of the settlement agent or title company. In some cases the account name has portions of the settlement agent name combined with an individual’s name. If the account name is not an exact match, the wire instructions are not accurate. That said, the account name in the wire instructions is not the only thing that should be relied upon.

A wire transfer is an immediate form of payment. It is sometimes irreversible, even if fraud is involved. If a consumer falls prey to the diverted wire transfer scam, not only could they lose the money they transferred, but they would still need to provide the funds required to close on their property purchase.

Real estate professionals should communicate to consumers that they need to call to verify the wire transfer with a known, trusted source at the settlement agent or title company who can identify the details of the specific transaction, as well as verify the bank wiring information.

Consumers should be warned not to send any money without talking to a live person with details only the settlement agent would know and a complete verification of the wire information.

In addition, consumers should never use the phone number provided in the email containing the instructions, they should use phone numbers they have called before or can otherwise verify. And, they should never send an email to verify, as the email address may be incorrect or the email may be intercepted by the fraudsters.

(2018, July). Discount for early wire. Retrieved from: http://fraudinsights.fnf.com/vol13iss07/article1.htm