Please protect yourself from scams!

39 Replies

A friend who is not an investor is buying a house to live in. This is her first home purchase.

She has had a less than stellar experience with her agent, her title company and her experience in general. At the last minute on Thursday afternoon, her title company emailed wire instructions to her. At 1:00 am they sent new instructions with different bank information.

She was at first frustrated with the new instructions so last minute, which quickly turned to horror and anger when it was discovered that the new instructions came from an email account that had been hacked.

I am even more angry on her behalf because the title company said this has happened about 30 other times, yet at no point in her interactions with this title company was she warned this was a possibility.

Please read this article about common real estate scams . Take proactive measures and get the wire information from your title company well in advance of the transaction. Do NOT believe last minute emails that reroute you to a new account, and make sure to confirm the account information on the phone after you receive it. 

As a general rule of thumb, anytime you get a request for money, transfer request, etc. no matter how urgent it may appear. Call to verify it. If the strange message comes with a phone number ignore it and find the number from another source, then call. These scammers prey on those that are feeling rushed and hassled, which means those that take a minute to verify what they receive usually can defeat them.

I hope your friend has a better experience next time,

Allen Fletcher

Thanks for the post, @Mindy Jensen . It's astounding that the title company has had 30 previous occurrences of this issue and has not taken the proper steps to safeguard their network. Cyber attacks are on the rise and hackers are becoming smarter every day. 

To all of our members here at BP, please protect yourself by setting up good and different passwords for all of your financial and critical accounts (banks, credit cards, brokerage, etc.) Try not to use passwords that include names of your spouse, kids, or pets, or any numbers that can be found publicly like your phone number, anniversary, birth date, address. 

Also, use different passwords for different websites. A simple way to create a memorable password is to embed the initials of a webpage in your password. Be creative and use your own method that ONLY YOU know.

Example: login: User at BiggerPockets.com -> PW: "***BP***"

When I was a bank manager, wire fraud was always one of our biggest concerns.  Several times I saw these attempted scams.  Most banks will ask questions about how you received the wire instructions, but like the previous posters said you should ALWAYS call to verify the instructions before initiating the wire.

I have a friend that this happened to 3 years ago. He just retired and his wife wanted to move closer to the grandkids. The closing on their existing house went well with no problems. They got the money and wired it to their title company for their new home. Went to closing the next day and found out the title company never received any funds. $350,000 gone! Three years later after getting an attorney involved they received a settlement from the bank & title company for $280,000. They were happy to get it!
Wish I could carry cash to closings - it would be safer accompanied by Mr. Smith & Mr. Wesson.

Mindy,, one of my vendors was on the phone with my staff when we got an e mail from her asking to change her bank account to a different bank etc.  My staff said Hey Julie did you just send me an e mail .. she says NO.. well we got new wire instructions for you... well they were bogus turned out someone got into her system.. was intercepting her e mails to my office and to our closing attornies office.. 15k almost gone..   if you can confirm a fax number those can't be hacked to my knowledge.

and pretty much every title company I do business with these days has a big fraud warning at the bottom of their wire instructions.

I can only guess how many millions and I mean millions goes missing a day with these hacker crooks.

The title company that I work with told me that this happens frequently. They include language in their instructions regarding ignoring such requests.

As far as passwords go just use a password manager. I use Last Pass which generates a random password hash and saves all my passwords for me. I use 2 factor authentication on almost all my accounts. At the end of the day all that won't protect you from phishing scams like this. They use social engineering to trick you. They use emails addresses that have domains similar to legitimate ones. But yes call and verify.

WARNING!WIRE FRAUD ADVISORY
Wire fraud and email hacking/phishing attacks are on the rise! If you have an escrow or closing transaction with us and you receive an email containing Wire Transfer Instructions, DO NOT RESPOND TO THE EMAIL!Instead, call your escrow officer/closer immediately, using previously known contact information and NOT information provided in the email, to verify the information prior to sending funds. In addition, Chicago Title does not alter its wiring instructions. If you receive new wiring instructions, please notify me immediately.

Mindy I could not type in the body of the response I just sent.. I was able to copy and paste that from an e mail I got this morning from Chicago title on one of my Indy deals that's closing this week

and that is the disclaimer on the bottom of their e mails in their sig line..

the closing attorney states I don't see this as much.. its up to each attorney how they want to run their shop.. I would say most do not mention it.. so in an attorney closing state double careful.

In all my deals, I've never been asked to wire anything. I've only ever brought a physical check to closing at the title company.  I've worked with 7 different lenders and 5 different closing companies. Is it normal to wire?

Originally posted by @David Zheng :

In all my deals, I've never been asked to wire anything. I've only ever brought a physical check to closing at the title company.  I've worked with 7 different lenders and 5 different closing companies. Is it normal to wire?

 Same with me, but I only buy locally and deal with the same Title company all the time - I have their cell phone numbers. So unless they get replaced a la Invasion of the Body Snatchers, I'm good. 

@David Zheng   you can bring in a check but it has to clear the bank before they can fund and record.. and if a closer if closing on your uncleared check they have a problem.. most title companies now won't even accept cashiers checks as those are being forged.

WE ONLY wire and WE ONLY accept wires for our proceeds..

there was a title company in Texas that went under and bounced millions of dollars of physical checks to their sellers.. OUCH..

But I still see closing attornies do this all the time.. they will take a check from a well known party and close the deal.. but I got to think if they ever got audited it would be clear that on the date of closing the check had not cleared yet.. that would be a violation and out of balance trust account.

I've heard of this scam a couple of times on here now.  I would think she could pursue legal action against the title company as they knew of the threat but did not protect their client. 

@David Zheng , I had a closing early last year. The title company emailed me a huge block of text and I'm not a newbie so I only half read it. (100% my mistake.)

They called me about an hour before the banks closed, and asked where my wire was. I was a little frantic, thinking the lender had not sent their funds. Nope, they received the lender funds but not my wire. I was shocked when I heard her say they no longer accept cashier's checks, and all funds must be wired. Good thing we were able to send the wire.

I can't believe this title company with their 30 previous times business and a warning about wire fraud isn't the first thing out of their mouths.

My bank does their own closings, so I just have to have money in an account there prior to closing.  

The few I have done in cash I just took a cashiers check with me to closing at the title company.  

I will definitely always be calling to verify if I ever have to wire!!!  

30 instances with the same company is crazy. You think they would have figured something out to safeguard against that if they know it's happening that often. 

I am a IT integrator installer technican and also have some It secrurity training. Yes, this fradulent scam has been going around for some time. The account is hacked, bank account info changed then the money is sent to a account in ingeria or some other country. As always call the company. DO NOT call the phone number in the email to confirm. I can change the Caller ID any time on my wholesale account at any time.

Lorin

I remember closing a deal that my good friend had in Wisconsin he lived in Manteca California, he was very leery about wiring funds, so I set up a bank account that was the same as his and he wired the funds to me and I was able to close for him by signing documents by way of Attorney-in-fact. If you have someone that you can truly trust and are leery about wire transfers then maybe that would be an option. However please don't trust last minute changes without any person to person contact. I wish you the best.

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