It’s easy to get caught up in excitement when closing on a new house, and that’s what fraudsters are counting on. Protect your money by following these best practices during the home buying process.
When purchasing a new home, it’s important to stay informed and cautious, especially regarding financial transactions. Real estate wire transfer fraud is a concern to be aware of, but by taking several proactive steps, you can confidently protect yourself.
What is Wire Transfer Fraud?
Wire transfer fraud happens when a hacker convinces you to send your closing costs to an account the hacker owns through the use of fake emails, texts, phone calls or websites. Once you send the transfer, getting your money back is almost impossible, leaving you with no funds to close on your home.
How Does Wire Fraud Work?
Scammers use a “spoofing” technique, where they will impersonate your real estate agent or lender. When you receive emails or texts from a spoofed account, it can look exactly like, or very similar to, it’s coming from your agent or lender.
Here’s a typical scenario. Before closing on your home, you receive details from your lender regarding how much money you owe at closing. Then, days later, you receive an email from your “real estate agent” or your “lender” with an urgent message that there are new instructions for wiring the money for your closing costs. The message looks completely legitimate, as if it’s coming from your agent or lender. You feel panicked about getting the money to them as soon as possible so that your closing goes smoothly and on time, so you initiate the wire transfer.
A few days later, your agent contacts you to see if you have your closing costs ready. You then tell your agent that you already wired over the money. Your agent contacts your lender and confirms that your lender never received any money from you. The result can be devastating.
How To Avoid Wire Transfer Fraud
Here are steps you can take to prevent mortgage wire fraud:
- Talk to your lender or agent directly about valid payment methods, and don’t discuss the closing process through email.
- Never email or text financial information. Meet in person or have phone conversations to discuss.
- Be wary of any last-minute changes to your closing details, especially via text. Scammers are intentionally trying to panic you into wiring the money immediately.
- Don’t respond to any texts with wiring instructions. Call your lender directly to confirm any wiring details. They will be able to confirm the name on the account, the amount due, and the account number without any prompting from you.
- Always trust your gut. If something doesn’t seem right, it probably isn’t. Contact your lender to ensure that any changes are legitimate.
At First Entertainment, we value our members’ rights to a safe and secure banking experience. If you have any questions, please call us at 888.800.3328 or send us a Secure Message.
