Don’t Get Scammed by Escrow Closing Wire Fraud

An SF home buyer—excited and anticipating the closing—almost lost $200,000. It was a close one. A client of an SF real estate firm was just minutes away from pushing the button on wiring $200,000 into an escrow account (all looking legitimate) that had been set up by a real estate agent of the firm—the instructions for the transfer coming in from that agent’s email. Everything looked good to go and the client was ready. But the transaction wasn’t real. The agent email was a scam, as was the escrow company. The client pulled back in the last 60 seconds after seeing something suspicious. That client was lucky. However, many have already lost $50,000 a pop in these escrow scams that feed on people eager to nail down a dream home with earnest or purchase money. That money—which is transferred immediately out to some offshore account—will never be recovered.

This scam has been growing in San Francisco, so be sure to look carefully at emails that come in from your agent or from escrow firms. Hackers are able to capture real estate agent email addresses, mimic their look and style and send out emails that direct clients to send money into fake escrow accounts complete with realistic looking escrow site features.

Both buyers and sellers can be victims of this scam, so agents, sellers and buyers should be alert.

Agent emails can be hacked, or captured through phishing (tricking someone into giving away usernames and passwords), or fake email accounts are created.

Agents need to be on guard to protect their access info more carefully than ever. Every transaction involving an escrow money transfer should be confirmed by phone and by talking directly to the escrow officer in charge of the transaction. That officer should verbally state the correct account number information without prompting or hesitation. Do not do anything on the basis of an email alone.

If you have any suspicions about escrow wiring instructions, you should notify your real estate agent, your bank and escrow holder.

Further information can be found at these online sources: