Wire Fraud and Closing Security: Protect Your Money
I talk about wire fraud with every buyer before they close. Not to scare them -- to prepare them. The scheme is simple, the losses are devastating, and the prevention is straightforward once you know what to watch for.
How Wire Fraud Works in Real Estate
Criminals monitor email threads between buyers, agents, and title companies. When a closing is approaching and wire instructions are about to be sent, they send a spoofed email that looks like it came from your title officer or your agent. The email contains revised wire instructions directing your funds to the fraudster's account.
The spoofed emails are convincing. They use the title company's logo, mimic the sender's writing style, and often reference real details from the transaction. Buyers who are tired and stressed after weeks of the buying process are particularly vulnerable because they want to just get it done.
What Legitimate Title and Escrow Companies Never Do
A legitimate title company will not send new or changed wire instructions via email alone, especially at the last minute. If you receive an email with 'updated' wire instructions, that is a red flag that demands immediate verification.
Legitimate companies also do not pressure you to wire immediately or outside business hours. They do not tell you to disregard earlier instructions without a direct, verified phone confirmation.
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How to Verify Wiring Instructions Safely
Before wiring any money, call your title officer directly using a phone number you sourced independently -- from the title company's official website or from documentation you received at the start of escrow, not from a number in the email you just received.
Confirm the account number and routing number verbally. Then confirm them again. This call takes three minutes and can save you your entire down payment. I make this standard practice for every buyer I work with and I walk them through it personally.
What to Do If Something Seems Wrong
If you receive wire instructions that seem different from what you were told to expect, stop. Do not wire. Call your agent and your title officer immediately using verified numbers.
If you have already wired funds to the wrong account, call your bank immediately to attempt a recall, then contact your title company and your agent. Report it to the FBI's Internet Crime Complaint Center (IC3.gov). Speed matters -- the window to recall a wire is very short and often closes within hours.
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Written by
Jon Hegreness
REALTOR / Associate Broker, Howe Realty. AZ License BR540940000. 24 years in Phoenix Valley residential real estate.
I am a full-time Valley associate broker, not a call center. If anything here raised a question about your own move, ask me and you get a straight answer from the person who wrote this, every time.
Common questions
- How do I know if a wire instructions email is real?
- You verify it by calling the title company at a number you independently sourced, not from the email. Never trust a phone number provided in the same email as wire instructions. Legitimate title companies expect and welcome this verification call.
- Can wire fraud money be recovered?
- Rarely. Once the wire is completed and the funds are moved, recovery is difficult and often impossible. Prevention is the only reliable protection. Verify before you wire.
- Is cashier's check safer than a wire?
- Cashier's checks are accepted for smaller amounts in some closings, but large transactions typically require wire transfers. Cashier's checks have their own fraud risks. Either way, verify instructions through a trusted, independent channel.
- Who is responsible if I send money to a fraudster?
- The legal landscape is complex and outcomes vary. The burden typically falls on the party who authorized the wire. Title companies carry some fraud protection, but coverage is not guaranteed to make you whole. Prevention is the only reliable answer.
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