Willie Sutton was an American bank robber and he was asked why he robbed banks. He answered, “because that is where the money is!” He stole about $2 million during his 40-year career. However, internet scammers are stealing much more by using phishing schemes and preying on unsuspecting home buyers.
These scammers know where to get the money because they know that home buyers have a down payment and closing costs and are being expected to wire transfer it to close on their home. In their 2018 Internet Crime Report, the FBI stated that victims lost over $149 million and the CFPB (Consumer Financial Protection Bureau) estimates losses at over $1 billion due to fraud in real estate transactions. These scammers want to take advantage of you while the money is still in your account.
Scammers will send you spoofed emails during the closing process from someone you expect to hear from like a real estate agent or your settlement agent. The send false instructions for wire transferring the funds.
Here are some suggestions that can help to protect you and possibly, avoid the scammers:
- Call before you click to verify the wiring instructions to transfer funds. DO NOT use the phone number or email in the email request. Use a trusted source, preferably, in person, of contact information.
- Confirm everything independently with your real estate agent and closing officer. Confirm the actual instructions with the bank before transferring money.
- Verify immediately, within four to eight hours, with the title company and real estate agent that the money was received. If it has not been received, notify the bank immediately to determine if it can be cancelled.
If you got one of these phishing emails and clicked the link, call your bank immediately and ask them to issue a recall notice on the money transfer. Then, file a complaint with the FBI at www.IC3.gov and report it to your local FBI office.
The CFPB has released two documents to inform consumers about wire fraud scams that commonly occur during closings: Mortgage Closing Checklist and Mortgage Closing Scams.
This is for informational purposes only and should not be considered legal advice.
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