Escrow Fraud Warning
Here’s another troubling story and a warning about escrow fraud and verifying your escrow payments. Here is a very sophisticated person, supposedly an executive in Silicon Valley, whatever that means, who sent $400,000 of down payment on a house to a scammer. Warning House Hunters: we’ve been warning House Hunters for four or five years about this escrow fraud, and the way it works is scammers and hackers get into the email systems of real estate agents, even home inspectors, mortgage companies, and title companies.
How Scammers Operate in Real Estate Transactions
They see that a transaction is happening, they see that people are buying and selling a house, and the reason that this is doable is because the process of buying a house might take 30 to 45 days. There are emails that go back and forth, and they monitor those emails, get everybody’s names, addresses, logos, and right at the end, when it’s time to close on the deal, they insert themselves into the conversation. They send a fake email to the buyer that says, “Here are your wiring instructions for your down payment,” or if you’re paying cash for the house, they’ll say, “Here are your wiring instructions for paying for the house.”
The Deceptive Email and Wire Transfer
You send the money according to that wire transfer instruction, and the email will look very legitimate. It will have the name of the person you’ve been dealing with at the title company, their logo, website, and all the right information, including phone number. The only difference is the banking information. The information they give you will be sending the money to them as scammers overseas somewhere, and you won’t know it until afterward when the real title company says, “Hey, wire the money,” and you respond, “I already did.” They’re going to say, “No, sorry, you didn’t.”
Simple Ways to Avoid Escrow Fraud
So how do you avoid this? It’s actually very simple to avoid. There’s an easy solution. All you need to do is if you’re going to wire a significant amount of money to anyone for anything, much less $400,000 for a piece of real estate, first of all, send a small amount as a test. Send them $10, $100, or $1,000 to the wiring instructions. Then physically go to the title company and ask them, “Did you get that wire? Did you get that transfer?” If they say yes, say great, then go back to your bank and say, “Now send this amount for $400,000 to the same number.” Don’t change it, don’t give them anything different, to the same exact number, and that will ensure that the right person gets the money.
Additional Precautions for Safeguarding Wire Transfers
Other things you can do is get the wire instructions not by email or phone but in person. Go to the title company, have them write it on a piece of paper so you know that person is for real, and bring that to the bank. I would still do both. Even if that person gives you the wire information, maybe they put a digit wrong. Even if they give you a printout, go to your bank, send $100, and then send the whole amount. It’s a little inconvenient to send two wire transfers, but how much more inconvenient is it to lose $400,000? It could be completely avoidable.
Access Free Resources to Prevent Escrow Fraud
You can find out more about this process at our website, verifyescrow.com. It doesn’t cost any money; it’s a free website that gives you all the instructions. If you’re a realtor, it gives you checklists to give to your buyer on how to do this. Every single real estate professional should make this part of their instructions to their customers. Do a test transfer. The days of losing money on these fraudulent escrow payments should be over. It’s been happening for five years; there’s no reason for it to still happen. There’s an easy solution, and everybody should know about it. There shouldn’t be any more losses.
Spread the Word to Protect Real Estate Buyers
If you know someone in the real estate industry, send them the link. It’ll give them instructions and a checklist so they can avoid losing their life savings to a scammer.
