Greg's Corner

When buying a home, double-check that email

By Greg Collier

The business email compromise scam has become popular with scammers over the past few years because it is extremely profitable for them. It only takes one victim to fall for the scam for the scammers to make hundreds of thousands of dollars.

There are typically two versions of the BEC scam. The first one targets corporate interests. Scammers send emails to employees or executives in a company, pretending to be a high-ranking official, such as the CEO or CFO. The email will often instruct the recipient to transfer funds or provide sensitive information such as bank account numbers, passwords, or other personal data.

The other version of the BEC scam is the one we’re interested in today, and it’s where scammers will try to intercept the wire transfer of funds from the home buyer to the seller or the escrow company.

For example, a man from Stamford, Connecticut, almost lost $426,000 to BEC scammers. The scammers had infiltrated the man’s email exchanges with his realtor, and told him to wire the money to a fraudulent bank account. Luckily, his bank was able to freeze the transfer before the scammers could make off with his money. Unfortunately, not every BEC scam victim can recover their money.

A similar thing happened to a retired teacher from Colorado. She lost almost $200,000 to BEC scammers while trying to buy a home. At some point, while exchanging emails with the title company, the conversation was hijacked by scammers. The victim was pressured into wiring the closing costs to a scam account. When she went to the title company to close on the home, she was devastated when they told her they never received any payment. The $200,000 was all the money the woman had. Even with the involvement of the Colorado Bureau of Investigation, it’s not certain she’ll recover her money.

BEC Scams can happen one of two ways. Sometimes the scammer will use an email address that’s similar to the authentic email address. So, when dealing with realtors, banks, and escrow companies, double-check the spelling of the email address before replying. The other way the BEC scam happens is when a company has had their business emails compromised by hackers or malware. In this instance, if the email appears to be legitimate, always double check with a phone call to the party that’s supposedly requesting the payment.