Many types of fraud impact unsuspecting people daily; however, none of them are as insidious and devastating as escrow wire fraud on a real estate transaction. Wire fraud in the US is estimated to exceed $1 trillion annually, which equates to around 3,000 frauds per day at about $1 million each. Not all of these instances of wire fraud amount to a million dollars, which only means that wire fraud is happening more frequently at lower dollar amounts, causing havoc to more people than we may realize. 

How does escrow wire fraud happen?

Escrow fraud can happen to anyone, even the most seasoned realtors or property owners. The scam goes something like this…

Let’s say you’re getting ready to buy a new home; you’ve been working with a local realtor and title company to process the transaction. It’s coming up on your closing date, and you receive an email from who you believe to be your title company, including instructions on where to send your down payment. 

At first glance, it looks like the email came from your title company. Assuming it’s correct, you follow the instructions and wire your full down payment to the account number provided in the email. After the funds are sent, you receive confirmation and believe that this part of the transaction is done; until the actual title company contacts you with the real instructions.

Confused when you receive the next email from your title company, you tell them you’ve already sent over the down payment using the instructions from the last email. Unfortunately, they tell you that this is the first email they’ve sent with wire instructions, which is when you realize that your down payment money is gone and in the pockets of a scammer. 

Does escrow wire fraud only target buyers?

Scammers can target anyone involved in the transaction, from the realtor to the seller to third parties like the home inspector. If the scammer can access an email chain, they’ll try to impersonate anyone they can. The scammer may pretend to be a senior employee at the title company who would likely be authorized to redirect funds to a different account. This would not cause alarm with other employees if requested. They may also target the realtors pretending to be the title company to reroute the closing funds. Escrow wire fraud threatens everyone involved in the real estate transaction. 

What are the red flags of escrow wire fraud?

With today’s technology and the ease of duplicating a website, it can be difficult to identify scammers in the wild. However, here are some hallmark red flags that indicate attempted escrow wire fraud:

  • You receive an email or phone call from your title company out of the blue without previously discussing plans for a wire transfer.
  • The email address is slightly different. ( vs.
  • The website URL is slightly different. ( vs.
  • The website was recently created and has no archived history.
  • The email is asking for additional personal information not relevant to the transaction.
  • The email has language that conveys a sense of urgency to send the full amount.
  • The instructions are unclear or do not make sense.
  • The email is written in a way that is out of character for the sender.
  • The instructions tell you to wire your funds in a different way than previously discussed with your title company.

There are many red flags of escrow wire fraud that evolve every day as scammers evolve. The best way to prevent becoming a victim is to know what to look for and to use the Call-Click-Confirm method before wiring your funds.

Best practices to avoid escrow wire fraud: Call-Click-Confirm method

The #1 way to avoid escrow wire fraud is to follow the Call-Click-Confirm (CCC) method. When you receive instructions for the wire transfer, consider the CCC method. The CCC method goes like this:

Step 1: Call your escrow company

When you receive the instructions, call your escrow company. Don’t use the number from the email; scammers could’ve spoofed this. Instead, find a business card or do a Google search of the title company and call that number directly. Ask them to verify that they sent you the email and to verify the address provided. If they did not send the email, do not wire the money.

Step 2: Click to send a test transfer

Even though your title company has confirmed that they did, in fact, send the instructions and the account number, send a test transaction before sending the full amount. Send a small amount, like $20, to the address. This way, if the address is still fraudulent, you’ll only lose a small amount, not your entire savings. 

Step 3: Confirm the test transfer

After the test transfer is sent, call your title company to confirm they’ve received the funds and to verify the amount of the test transfer. Once confirmed, you can send the remainder of your payment to the exact address. After you’ve sent the remaining amount, it’s a good idea to call and confirm again that they’ve received it. 

Escrow wire fraud has the potential to completely derail your life; it’s important to understand the risks involved with the real estate process to keep yourself and your assets safe. If you’ve already been the victim of escrow wire fraud, file a case with the Internet Crime Complaint Center (IC3). If the fraud occurred within 72 hours, the FBI might be able to assist in implementing the Financial Fraud Kill Chain (FFKC) to reverse fraudulent wire transfers. 

Scammers are constantly evolving, but they won’t win every time. By preparing yourself before going into the real estate transaction and using the CCC method, you can have peace of mind knowing that your funds are going to the right people. 

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