Subscribe
Share
Share
Embed
The Expert Podcast brings you firsthand narratives from experts across diverse industries, including private investigators, general contractors and builders, insurance agencies, vehicle specialists, lawyers, and many others.
Here's another troubling story and a warning about escrow fraud and verifying your escrow payments. This is about a very sophisticated person, supposedly an executive in Silicon Valley—whatever that means—who sent $400,000 of a down payment on a house to a scammer. Warning to house hunters: we've been cautioning house hunters for four or five years about this escrow fraud. The way it works is that scammers and hackers get into the email systems of real estate agents, even home inspectors, mortgage companies, and title companies.
They see that a transaction is happening. They see that people are buying and selling a house. The reason this is doable is that the process of buying a house might take 30 to 45 days. During this time, emails go back and forth, and scammers monitor those emails, getting everybody's names, addresses, and logos. Then, right at the end, when it's time to close on the deal, they insert themselves into the conversation and send a fake email to the buyer. This email will say, "Here are your wiring instructions for your down payment," or, if you're paying cash for the house, "Here are your wiring instructions for paying for the house."
You send the money according to that wire transfer instruction, and the email will look very legitimate. It will have the name of the person you've been dealing with at the title company, their logo, their website, and all the correct information, including phone numbers. The only difference is that the banking information will be changed, and the money will be sent to the scammer, often overseas, without you knowing it until it's too late. When the real title company contacts you saying, "Where's the money?" you might reply, "I already wired it," but they'll say, "No, sorry, you didn't."
So how do you avoid this? It's actually very simple. There's an easy solution. All you need to do is, if you're going to wire a significant amount of money to anyone for anything—much less $400,000 for real estate—first, send a small amount as a test.
In the meantime, remember that ActualHuman.com offers live, one-on-one private video consultations with experts on this exact subject. We want to hear your story, answer your questions, and provide expert advice on your situation. Now, back to your video.
Test the wire transfer by sending them $10, $100, or $1,000 to the provided wiring instructions. Then, physically go to the title company and ask, "Did you get that wire? Did you get that transfer?" If they say yes, you can then go back to your bank and say, "Now send the rest—$100,000 or more—to the same number." Do not change anything or give them any different instructions. This ensures the right person gets the money.
Other things you can do include getting the wiring instructions not by email or phone, but in person. Go to the title company and have them write the instructions on a piece of paper. Now you know that person is legitimate, and you can bring that to your bank. Even then, I would still test the wire transfer. Maybe the title company makes a mistake and gets a digit wrong, or the printout is incorrect. Go to your bank, send $100 first, and then send the whole amount. It may be a bit inconvenient to do two wire transfers, but how much more inconvenient is it to lose $400,000? This is completely avoidable.
You can find out more about this process on our website, verifyescrow.com. It doesn’t cost any money; it's a free website that gives you all the instructions. If you're a realtor, it provides a checklist you can give to your buyer on how to avoid fraud. Every single real estate professional should include this as part of their instructions to clients. Do a test transfer. The days of losing money on fraudulent escrow payments should be over by now. It's been happening for five years, and there's no reason for it to continue. There's an easy solution, and everyone should know about it. There should be no more losses.
If you know someone in the real estate industry, send them the link. It will give them instructions and a checklist to help their clients avoid losing their life savings to a scammer.
Thank you for watching. Remember, you can access live, one-on-one personal consultations with a licensed private investigator, a licensed commercial insurance broker, a certified real estate title examiner, or a certified civil court mediator. If you need to talk to an expert in any of these fields—or even a licensed general contractor—you can click the link below. Visit ActualHuman.com to arrange a live, one-on-one session with a licensed expert. You'll get undivided attention, and you can ask any questions to get the information you need about your situation. We'd be glad to help.