It’s a nightmare scenario: You’ve been saving to put down a payment on your dream home. You’re about to close the deal, but instead, you’re deceived into wiring your money to an account outside of the country. You lose it all – the money, the new home, and possibly your life savings.
This may sound exaggerated, but it’s not. It’s the classic “business email compromise” scam, but this version targets people buying a home. The problem is that this scam is claiming more victims than ever.
It’s a devastating scheme. The victim not only loses all the money they saved for a down payment, but it destroys their dreams and lives as well. Some who have been victims of this scam have lost hundreds of thousands of dollars, their dream home, and even their life savings.
The FBI reports that this kind of scam is on the rise. A company known as Proofpoint is also tracking these schemes. According to Proffpoint, email schemes have reached a level 14 times higher than last year.
How does it work?
It doesn’t take much for scammers to make this scheme work for them. They send emails to lawyers and real estate agents, who unwittingly click a link in the email and their malware is installed, compromising their email account. The scammers now have control of the email and can monitor the account for upcoming transactions. And the real estate professional has no idea this is occurring.
Then the time arrives to close the deal. The scammer will email the buyer from the hacked email account. The email seems perfectly normal, as the email address it’s sent from is familiar and the email content looks official. The emails will claim that plans were changed and that the buyer needs to wire money to the seller’s bank account.
And once you send the money, that’s it. The scammer has it in their account in another country where it can’t be touched by U.S. law. Scammers are stepping up their game, following up with a phone call to the buyer. They usually claim that they represent the title company or seller’s law office to further convince the buyer that the wire transfer is legitimate. This extra step pays off for the scammer, as the payout is immediate and far higher than other types of scams.
As we know already, the money is gone for good once it’s wired. And the bank is not responsible to reimburse the sender, since the sender is the one who initiated and authorized the transfer. This differs from someone you didn’t authorize just stealing money from your accounts. And since the funds are sent overseas, there’s basically nothing U.S. law agencies can do about it.
How Can You Protect Yourself?
First of all, don’t panic. All you need to do is apply some basic common sense and caution.
Be vigilant: Verify any suspicious emails regarding your transaction. Be alert. It’s better to be overly cautious than to lose everything.
Voice verify: You must follow up any emails with a phone call to the sender if the email asks you to sign a document, log into a new website, send money, or give them any financial information. Yes it takes a few minutes, but it’s well worth the time.
Talk to your bank: Check with your bank to see if they will place restrictions on wire transfers from your account in the form of a voice verification or other checkpoint.
Don’t immediately respond to email: If you get an email that requests some kind of action, regard it with suspicion and follow up with a phone call to the individual sending the email.
We can all protect ourselves from these form of scams if we use care. You can always feel free to contact our office if we are helping you buy a home with any questions about emails you receive from us or anyone involved in the buying process.