Homebuyer Toni Powell was in the final stages of closing on a home when she said she fell victim to a wire fraud scheme that cost her thousands of dollars.
It started with an email claiming to be from her title company.
“It was two people acting as my title company and my realtor,” Powell said.
The emailed message, which even included her title agent's photo, instructed Powell to “please wire $7,542.47 before noon” that day.
“They knew where I was moving to,” she said. “They knew I was going to be closing. And they asked me for a down payment.”
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Powell tells us she rushed to her bank and wired the more than $7,500 to a bank account the agent gave her. When she arrived at her closing, she learned the email had not come from her title agent.
“I said ‘What do you mean? I got the email from your company.’ She said nobody sent you an email from our company,” Powell said.
Watch wire fraud victim explain how easy this is to fall for:
Beware of wire fraud during closing
The spring homebuying season makes homebuyers even more susceptible to certain types of fraud, according to warnings from several businesses, organizations and government agencies.
On its website, Rocket Mortgage warns, “Mortgage wire fraud is a scam in which a hacker poses as your real estate agent and convinces you to divert your closing costs to a fraudulent account.”
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The District of Columbia Department of Insurance, Securities and Banking also warns of “real estate wire transfer scams.”
If you receive wiring instructions you were not expecting, Melanie McGovern with the Better Business Bureau advises homebuyers to call their agent or company directly and look closely at email addresses or phone numbers.
“If it’s not from the person you’ve been working with -- if it’s not from the domain of the website of the company you’re working with, that’s a big, big red flag,” she said.
On its website, the DISB cautions, “If you are buying a home and get an email with money-wiring instructions, STOP. Email is not a secure way to send financial information, and your real estate professional or title company should know that.”
McGovern said urgency is another sign of potential fraud.
“If they are insistent, if they're giving you instructions how to do it,” she said, “that's a huge red flag.”
Keeping your money safe
The DISB recommends always meeting your trusted real estate professional in person to verify account names and numbers where money should be wired.
According to Rocket Mortgage:
- Understand your closing process ahead of time
- Write down contact information
- Beware of last-minute closing changes
- Call to confirm wiring instructions
- Never email your financial information
Powell's title company and bank told us nothing could be done to retrieve her funds because she sent them voluntarily.
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She believes her email account or her title company's email account was hacked. Now, she is warning other buyers and sellers to think twice before sending money based on an email.
“I would never wire money anywhere ever again,” she said. That way, you don't waste your money.
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