What You Need to Know About Real Estate Wire Fraud
So, you’re buying a new home. You’ve toured the property, made an offer, and the seller has accepted. Now that the details are arranged, you just want to complete the transaction so you can get to the fun part — enjoying your purchase.
In order to do that, you have to do a wire transfer to move the funds to the seller’s account and complete the sale. But — is this really safe?
Is Wiring Money Safe?
Maybe you’ve heard horror stories about wire fraud and aren’t sure your money will make it there safely. You’re especially concerned about the security of your money while the transaction goes through. What can you do to put your mind at ease and ensure the process goes smoothly?
As simple and straightforward as a wire transfer can be, there are risks involved. Wire fraud is an increasing threat, particularly with real estate transactions when the amounts are larger and fraud is difficult to trace.
However, even though scam artists have gotten smarter — so, too, has internet security. There are safe ways to transfer money — as long as you work with the right methods and organizations.
Protecting Yourself Against Real Estate Wire Fraud
To help prepare you for handling real estate transactions securely and confidently, we’re going to share everything we know about wire fraud so you can protect yourself and complete the process with minimal risk.
Let’s start by understanding what wire fraud is, some signs to watch out for, and how to protect yourself from wire fraud to ensure a secure transaction.
What is Wire Fraud?
Wire fraud is the action or attempt to commit fraud using electronic means. It can take different forms, such as spoofing, phishing, or telemarketing fraud, but all with the purpose of intentionally deceiving someone in order to gain access to information or currency.
In real estate, wire fraud is increasingly common. When you wire money to buy a home, you’re transferring funds from one account to another electronically. The advantages of this process are that money can be transferred quickly and — in general — securely. But, wire fraud can occur when a criminal defrauds or attempts to defraud the buyer by impersonating someone else — their bank, the seller, a real estate attorney, or whoever they can to gain access to your account information.
When a fraudster targets a real estate transaction, there will usually be signs that something is off. Let’s explore some of the things to watch out for to help you detect if you’re being targeted for wire fraud.
7 Warning Signs of a Money Transfer Scam
If you stay alert during the process and look out for common signs of wire fraud, you can ensure a smooth and secure transaction. Look out for these 7 warning signs of a money transfer scam:
- Urgent requests: Likely in the form of an email informing you that the transfer needs to happen immediately.
- Changing instructions: If the instructions change, especially to include a different bank, account number, or contact, it’s likely a sign of fraud.
- Giving secondary instructions: If you receive duplicate instructions from different email addresses, call and confirm instructions with your bank or escrow company.
- Blatant spelling errors and grammar mistakes: This is a likely sign that someone is targeting your transaction from outside of your country or region.
- Different account number or information: If you notice discrepancies in account information, do not send money without confirming the true account number.
- Request to send information to multiple people: Neither your bank nor the seller should ever request information or money to go to multiple accounts or contacts — this is a clear sign of fraud.
- Changing the date of transfer: If the time or date of the transfer is changed, especially last-minute, it’s likely that someone is attempting to corrupt the transaction. Call your bank or escrow company to confirm.
You’ve likely noticed the pattern here, but if you spot any of these signs, or suspect wire fraud, always call and check with the financial institution or escrow company handling the transaction.
If you believe that you’re a victim of a scam wire transfer or attempted money transfer scam, report the activity to the Federal Trade Commission.
4 Ways to Protect Yourself Against Wire Fraud
While the risk of wire fraud may be alarming, there are ways to complete a wire transfer safely, and in fact, safe wire transfers happen every day. By being aware of the signs, you can protect yourself from falling into an easy trap, and ensure that your transaction is completed securely.
#1 Read and Follow All Instructions Carefully
You’ll receive wire transfer instructions from the agency facilitating the transfer, whether it’s a financial institution or escrow company. Make sure you understand each step and that you have all the information needed to complete the transaction.
#2 If Anything Seems Out of Place, Call and Check.
If you’re ever unsure about the security of your account, transfer, or upload — always reach out to double-check and seek confirmation from the other party you’re dealing with — ideally with a phone call.
It’s always better to err on the side of being over-cautious. And, if someone is unwilling to speak with you over the phone and insists on only email communication — well, it’s likely you’re not dealing with who you think you are.
#3 Document the Process as Thoroughly as Possible
Keep careful records of the wire transfer instructions, email correspondence, and any other relevant documentation as you move through the process. If any wire fraud activity does occur, you’ll have evidence to substantiate your claim.
#4 Work with a Trustworthy, Secure Escrow Company
An escrow company can provide additional security to your transaction by facilitating a secure transfer and holding funds until all parties of the sale are satisfied. As experts in high-stakes transactions such as real estate closings, escrow agents understand how to make the process secure for all parties involved.
At Global Escrow Solutions, your security is our top priority. We protect you by providing clear instructions for transferring money via wire transfer, never changing our instructions, and never changing our account number. We’re always accessible to our clients if there are any concerns and we’re happy to confirm details and walk you through the process to make the transaction as smooth and stress-free as possible.
If you have any questions about our process or want to learn more about what we’re doing to make international real estate transactions smoother and more secure, give us a call or reach out to our team online.