Published by Kelly Sells Boston · About Kelly Cui
Key points
- Scammers break into or imitate transaction emails and send payment instructions that look genuine.
- Before you authorize any payment, whether a deposit or closing funds, confirm the wire details in person or by calling a number you agreed on earlier through a reliable channel.
- A sudden change to the account name, routing number or account number is a reason to stop and verify.
- If you suspect fraud, call your bank or wire-transfer company immediately to ask for a wire recall, and report it to the FBI and local police. Recovery cannot be guaranteed.
How the scam works
A home purchase moves large sums on a predictable schedule, which makes it a target. Scammers try to get into the email of real estate professionals, often through phishing, so they can read messages with clients and spot an upcoming deposit or closing payment.
As a payment date nears, they send a message that appears to come from someone in the deal, such as the real estate agent, the settlement agent or the attorney, with a lookalike address and a copied signature. It announces a last-minute change to the wiring instructions, with a reason that sounds routine, and tells the buyer to send the money to an account the scammer controls.
- A familiar display name over a slightly different email address
- A plausible-sounding reason for a sudden change of bank account
- Pressure to wire right away or lose the house
Set up a trusted channel at the start
The Consumer Financial Protection Bureau (CFPB) suggests choosing two trusted people early, such as your real estate agent and your settlement agent or closing attorney. Talk with them in person or by phone about how the closing will work and how money will be transferred, and write down their names and main phone numbers somewhere outside your email. You can also agree on a code phrase that only you and they know, so you have a way to confirm who you are dealing with later.
Agree at the outset that payment instructions will not be changed by email alone, and that you will confirm every wire instruction by calling a number you already have before any money goes out. Do not send account numbers or other financial information by email, and do not use phone numbers, links or attachments from an email you have not verified.
Before each wire
Before you send a deposit or closing funds, speak directly with one of your trusted contacts, in person or on the number you saved. Do not authorize the wire until that conversation has happened.
Reading the numbers digit by digit catches an account number with one or two digits changed; a general 'is this right?' does not. CFPB advice is to confirm the account name as well as the account number. The name on the instructions should match the recipient your attorney or escrow holder confirms on that call. If it names someone else, stop and find out why before sending anything.
Phone calls can be faked too. If someone calls asking you to confirm personal or financial details, or to give you new instructions, end the call and ring your trusted contact back on the number you saved.
- Call the number on your saved list, not one from a recent email or an incoming call
- Read out the bank name, routing number and account number digit by digit and have them confirmed
- Confirm with the firm that the exact account name matches the recipient it expects
Warning signs
Scams rely on urgency to get you past your own checks. Any notice that wiring details have changed should send you back to the number you saved, however reasonable the explanation sounds.
Watch the tone as well: a sudden change in writing style, odd phrasing, or a request to keep the new instructions to yourself. If an email says your attorney cannot take calls right now, hold the payment and verify by phone or in person at the office.
- Instructions sending money to a different bank, branch or out-of-state account than you were first given
- Requests for secrecy, or attempts to discourage you from calling anyone in the deal
- Claims that the contract will be voided unless you wire immediately
If you think money went to the wrong place
Act at once. Call the bank or wire-transfer company that sent the money, give the wire details and reference numbers, and ask for a wire recall. Then file a complaint with the FBI's Internet Crime Complaint Center at IC3.gov and report it to local police.
Reporting quickly does not guarantee the money comes back, but the CFPB notes that reporting as soon as possible can improve the chance of recovering it. Tell your attorney and lender as well, so they can look at how the contract deadlines are affected.
- Call the sending bank or wire-transfer company and request a wire recall
- Keep wire receipts, timestamps, emails and the receiving account details
- File a complaint at IC3.gov and report to local police
- Tell your attorney and lender
This guide covers verifying payment instructions. How and to whom your deposit and closing funds are paid is set by your contract and your closing attorney.