Email scam almost cost me 1 million dollars

Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes

6y

always get a verbal confirmation over the phone from the escrow officer . Great catch by the bank I am having a drink for you also

5 Reply

Dana WhickerPro Member

Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes

6y

@An Lam

Just heard a piece on the radio about this today. People are going old school. Not trusting any wiring instructions except by phone verification or even hand written on a piece of paper.

Unfortunately, we tend to lean heavily on email. However, emails are so easy to spoof it's not even funny.

Justin Abdilla

Attorney · Chicagoland · Member since 2019 · 103 posts · 90 votes

6y

The title company I use in Chicago got hit on this one last year. $370,000 gone in an instant. From that day on, we’ve begged everyone to voice verify. It’s so easy for the scammers to do it! Glad you got out safe!

4 Reply

OP

Rental Property Investor · Member since 2018 · 78 posts · 53 votes

6y

@Justin Abdilla

What happens when the title company loses the $370K? Who is responsible?

OP

Rental Property Investor · Member since 2018 · 78 posts · 53 votes

6y

@Dana Whicker after it happened the escrow officer called me and honestly I was wondering if it was really her!!

Lawrence Chun

Hanford, CA · Member since 2019 · 17 posts · 4 votes

6y

Glad to hear you didn't lose any money! That drink could've easily turned to a whole bottle had things went the other way!!

Justin Abdilla

Attorney · Chicagoland · Member since 2019 · 103 posts · 90 votes

6y

@An Lam

The title company ended up covering the transaction based on their other role as a settlement agent. The home buyer, under those facts, was protected.

OP

Rental Property Investor · Member since 2018 · 78 posts · 53 votes

6y

@Justin Abdilla

Do you know in my situation- would I have been protected in any way? Either bank FDIC insurance or through the title company?

Justin Abdilla

Attorney · Chicagoland · Member since 2019 · 103 posts · 90 votes

6y

@An Lam

I think if the scam had caught you, you’d have to sue the title company for negligence for failing to keep the emails of the transaction safe and causing you to fall prey to a malicious actor.

You would NOT be covered by FDIC but the title company might choose to cover you because they'd be very likely to lose that lawsuit.

Brent Paul

Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes

6y

Wow that is scary! I am definitely going to call and verify before sending from now on.

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

6y

@An Lam not to sound harsh but didn’t you post on BP a couple weeks ago asking what to do with 1 million dollars cash?

Then you stated you were closing on a house soon? If I’m remembering correctly, that probably aided the scammer immensely in targeting you. I’m glad it worked out but I wouldn’t post stuff like you did a couple weeks ago again...

6 Reply

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

6y

@An Lam if you lose money to a scam like this most likely you will be out that money

2 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

6y

I'm glad it didn't go through. There was a segment on the news tonight about someone who did get scammed and lost $800K on a real estate purchase. Sadly this was after the bank flagged the email as suspicious and the person at the bank still did the wire transfer.

Clint Votruba

Member since 2019 · 92 posts · 56 votes

6y

I believe in this situation, the title company would not be liable to reimburse you for your loss.

You of course would sue the title company and make an argument that they should have warned you etc.

However, even with warnings in email messages and documents, Buyers will forget or convince themselves that the emails are real and believe that they must act quickly as the email advises.

Many people simply don't believe they are going to be a victim of a scam but it happens everyday.

I once emailed wiring instructions to a Client and told him about the risks of doing so but that he would be ok if he called the title company and confirmed the wiring instructions. At closing the next day, his wire was late/hadn't hit yet and when I asked him if he'd called the title company before wiring, he said no.

I will never email wiring instructions to a Client ever again.

Many times consumers will not do as they are told/advised even when they have an attorney/Agent warning them of risks.

Now I fax/mail wiring instructions and verbally review them with the Client.

Glad you didn't get hurt here.

Good luck.

Scott Berry

Financial Advisor · Member since 2019 · 7 posts · 2 votes

6y

@Account Closed

The same thing happened to my father though they appropriated his realtor’s email. Thank goodness his bank thought something was not right and caught it.

My sister-in-law is an escrow officer and warns all clients not to wire any funds until they confirm the info by phone. This scam is rampant!

Jeff S.

Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes

6y

I occasionally get encrypted emails from title and escrow companies and sometimes from lawyers, but it's rare. It infuriates me that this is not the norm. There are so few major title companies you'd think they could agree on a common, more secure, communication process. NAR could also play a part helping set standards since I imagine there are a lot more end homebuyers getting scammed than investors.

I recently wrote here about a buyer that successfully wired $2.4M to the bank of a scammer after receiving an email spoofing his agent. Fortunately, he was so proud and excited, he immediately called escrow but only to be told he was scammed. Can you imagine? The bank actually received the money but was warned fast enough that they locked the account and he got his money back.

The lesson learned here is to always independently confirm your wire instructions as many ways as you can. I put some advice in my post.

Adding that if you don’t properly confirm wire instructions and wire money to the wrong account, it’s on you. Title is not responsible for the security of anyone’s emails or how carefully you communicate with them or anyone else.

The system currently sucks.

Clifford Paul

Rental Property Investor · Member since 2018 · 483 posts · 956 votes

6y

I have gotten these scam emails before but I always do my funds transfer while sitting in the title company office. Unless the closing attorney gives me bogus information I'm probably never going to be scammed.

Charlie MacPherson

China, ME · Member since 2014 · 3k+ posts · 4k+ votes

6y

These scams are very serious and very real. This is part of my email signature that attempts to warn my clients about them (the top line is in bold/red):

"IMPORTANT NOTICE: NEVER trust wiring instructions sent via email.

Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct."

I'm in the process of buying a new home in Maine and I've cautioned my wife about clicking on any unexpected links in email and to refuse to accept wire instructions via anything except voice - and we will call the title company to get them. No instructions are to be accepted from an incoming call as it's very easy to spoof caller ID too.

2 Reply

Alex G.

Eastern Mass & Central Maine · Member since 2009 · 252 posts · 135 votes

6y

Originally posted by @Account Closed:

A scammer intercepted some emails

You don't know that. This may have been an inside job.

Ibrahim Hughes

Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes

6y

Thanks for this. There are a couple of folks on my team who get annoyed by me when I constantly insist on verifying wiring instructions. For some reason they seem to think that just because we got off the phone an hour ago there's no need to verify. Although the phone conversation had absolutely nothing to do with the wiring instructions. Go figure. I just sent them this link.

Billy Smith

Shawnee Mission, KS · Member since 2016 · 719 posts · 313 votes

6y

Had partner who did get scammed caught it froze the wire transfer.

The title company has their email hacked.

Some folks are getting scammed and not being made whole by the title company

I say send overnight check no more wire transfer tell they get a hold on it.

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Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

6y

@Caleb Heimsoth rightly observed that Account Closed was way too loose lipped about what they were doing. Whether it is on BP or chatting at the gym, heck even "friends" can all be places where scammers target you. You talk in previous posts about looking for private lenders. It is most likely someone you came in contact with targeted you. Way more likely than it being the bank or closing company.

In most cases, the person who is the victim is out the money. If you respond to a fake request, the bank and closing company are not at fault. The majority of the time, the wire goes to an overseas account. The scammer will pull the money out of the account and close it within minutes of the money hitting the account. The only way you could hold the bank or closing company liable is if you could prove they were at fault in a data breach. I doubt that is the case here.

Calling to confirm is a good idea, but even doing something as simple as verifying the senders e-mail address most likely would have prevented this. Scammers will try to make the e-mail address look real, but it is not. Usually the scammers are using G-Mail or Yahoo accounts. Sometimes they go the trouble of setting up fake domains. The @XYZ.com of the address is the part you want to look at. If you have been dealing with JimWalton@xyz and then you get an e-mail from documents@XYZclosingdocuments you can see the domains are different. Maybe similar, which is meant to trick you. The way to tell if it is real is to match the domain EXACTLY. This advice applies to all areas of life. The campaign hacking that took place in the last election was simply a fishing scheme. Someone pretended to be Google and asked them to confirm a password. The person at the DNC gave their password to the scammer. Simply examining the senders e-mail address will prevent pretty much 100% of these scams.

Here is the truth. People say they were part of a "sophisticated scam" but in reality they were tricked with an easy method that requires no computer skills.

I have no idea why someone investing a million dollars would not have the common sense to be more careful. These types of wire scams have been prevalent on the internet for 20 years. I think it is getting worse because people are scared to use the phone.

4 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

6y

Originally posted by @Jeff S.:

I occasionally get encrypted emails from title and escrow companies and sometimes from lawyers, but it's rare. It infuriates me that this is not the norm. There are so few major title companies you'd think they could agree on a common, more secure, communication process. NAR could also play a part helping set standards since I imagine there are a lot more end homebuyers getting scammed than investors.

I recently wrote here about a buyer that successfully wired $2.4M to the bank of a scammer after receiving an email spoofing his agent. Fortunately, he was so proud and excited, he immediately called escrow but only to be told he was scammed. Can you imagine? The bank actually received the money but was warned fast enough that they locked the account and he got his money back.

The lesson learned here is to always independently confirm your wire instructions as many ways as you can. I put some advice in my post.

Adding that if you don’t properly confirm wire instructions and wire money to the wrong account, it’s on you. Title is not responsible for the security of anyone’s emails or how carefully you communicate with them or anyone else.

The system currently sucks.

we bought a property last december for 5.2 million cash. I was so nervous that I personally went to the bank and had them make out a cashiers check and hand delivered it myself.. the escrow officer in my presence then called my banker SVP of the bank to personally verify we had the funds in the account.. Oregon bank FATCO title company..

when i am selling i enclose our incoming wire instructions in my closing package that gets fed ex to title or closing attorney .

they will then call us.. if we are closing with a new closer we verbally verify. and I will even go so far as to street view on google their location and ask them Hey is your office by that Mc donalds on the corner knowing its a burger king.. and see what they say.

we got hacked once.. it was one of our vendors and it was for a construction draw got an e mail from her saying she changed banks.

Well this vendor rarely if ever e mails so we called her right away.. and lo and behold she got her emails hacked.

Cant be too careful

PS: i never beotch about encrypted e mails anymore LOL

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Andy Thompson

Contractor · Denver, CO · Member since 2014 · 38 posts · 24 votes

6y

@Account Closed A construction company i used to work for got hit. Their email got spoofed and the scammer had been emailing clients saying that our payment process changed and they should now wire scheduled payments to the new (scammer's) account. Normally, we're on site at the customers home to receive a check by hand. A client had told the project manager "hey I got the email to wire payment, no problem, I'll be sure to send the $50k on time." But luckily we jumped on it, informed our other clients, and noone lost any money.