It’s time to close on your dream home, and you’ve just sent your down payment and closing fees to the escrow company to close. You sit down to finalize the deal and that’s when you’re hit with the news that the funds never arrived. Your money has been stolen by a sophisticated scam that tricks homebuyers into wiring money to a phony account where it’s whisked away overseas. This doesn’t have to happen to you.
With a few simple prevention measures, your settlement fees will arrive in escrow safe and sound. Here’s what you need to know to be a savvy homebuyer, protect your down payment from wire transfer scams, and what to do if you’ve been a victim.
Knowledge is power and understanding the methods criminals use to trick people into sending them money is the first step to keeping your funds safe.
The trick to this scam working is that the email comes from the real account of the closing agent or real estate agent, and the criminals know exactly when to send a perfectly timed email with wire instructions.
Fortunately, keeping your money safe from wire transfer fraud is straightforward and just a few extra steps can prevent you from becoming a victim.
Don’t wait until the day of your closing to send the money to the title company. Sending your funds a day or two early helps avoid delays, and helps prevent last minute surprises at your closing.
Why a whole day early? Many banks only send wires out at a specific time, and sometimes they’re in a different time zone. You don’t want to miss the cut-off time or have your deposit arrive after the bank’s end-of-business, meaning the transaction won’t be sent or credited until the next day. Sending your transfer ahead of time also gives you a time cushion in case there’s a problem.
If you are a victim of wire transfer fraud, there’s still a chance you can recover some of your funds. Immediately call your bank and see if they can recall the transaction. Call the bank you sent the money to as well. They may be able to freeze the account and keep your money from being transferred out of it. Let your title company know what happened so they can be on the lookout for similar schemes, and alert the party whose email was stolen so they can lock out the hackers.
Get the authorities involved, whether you’re able to recover your money or not. Wire fraud falls under the jurisdiction of the FBI, and you should call them or contact their Internet Crime Complaint Center to file a complaint. You should contact your local police department and file an official report. Call the FTC at 1-877-FTC-HELP and report what happened, so they can try to get it shut down and add it to their database.
Having open communication with your closing agent goes a long way to help keep your transaction safe. You should be able to pick up the phone and talk to someone in person, and they should confirm with you that the money has arrived safely. Make sure you pick a title company you can trust to handle your closing.
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