Preventing Down Payment Wire Fraud

Preventing Down Payment Wire Fraud

At City Creek Mortgage, we’re proud of our reputation as a reputable mortgage company. We’ve been helping clients in Utah get the money they need for the home of their dreams for decades, and our mortgage and refinance services are second to none.

Unfortunately, like many popular industries, the mortgage world has its share of unscrupulous scammers. One popular mortgage-related scam? The down payment wire fraud. Hundreds of millions of dollars have been stolen using this fraud, and we want to help protect you from it. Here are some basics to be aware of.

How it Happens

In general, these scams will take place while you’re in the process of buying a home – the timing is important for scammers, to make it feel as real as possible. You’ll receive an email that appears to be from your actual real estate agent, telling you that instructions for wiring the down payment had changed, and giving you a new account number to send money to. A few possible red flags here:

  •     You may be asked for an incorrect down payment amount. There’s very little reason to ever pay a partial down payment, and no reason to ever pay more.
  •     The down payment is usually wired the day before closing. If they’re asking for a different date, this is suspicious.
  •     The email address will be almost your real estate agent’s, but not quite the same.

Rising Rates of Fraud

The rate of this wire fraud exploded by nearly 500 percent in 2016, and it became the 16th-highest form of reported complaint, with over 12,000 complaints that year. However, it held first place overall for total dollar losses.

How to Stop It

The simplest way: Call your real estate agent right away. Ask them if they sent that email, and if they say no, inform them that it’s likely their records have been hacked. If you happen to get tricked and fall for the scam, drop everything and call your bank immediately. From there, contact the FBI and the Federal Trade Commission, in that order.

Spotting Fakes

Most financial institutions will have a signature block at the bottom of every email and document indicating that the company will never change its wiring instructions for any reason. Anytime you get an email with money-wiring instructions and an account number, this is a red flag on its own – most institutions would never consider this form of communication for such an issue.

When you’re wiring money, ask your bank to confirm the account number and name on the receiving end just to be safe. After you’ve finished, contact your agent or the title company to verify that the money was received.

For more on spotting and avoiding down payment scams, or for any of our other mortgage services, speak to the brokers at City Creek Mortgage today.