The costly conundrum of real estate email compromise
By Greg Collier
Two years ago, a California couple embarked on the daunting journey of finding their dream home amidst a competitive market and low-interest rates. After viewing 50 homes, facing disappointment with three failed bids, they finally secured a house, breathing a sigh of relief. Little did they know, their ordeal was far from over.
Navigating through the intricacies of the escrow process, the couple encountered an unexpected twist at the eleventh hour. What seemed like smooth sailing turned into a nightmare when they received wire instructions for their down payment via email, purportedly from their escrow agent. Trusting the legitimacy of the communication, they wired a substantial sum, only to realize days later that they had fallen victim to a scam.
The email, meticulously crafted by fraudsters, mirrored previous correspondences, complete with a familiar tone and personalization, lulling the couple into a false sense of security. This suggests potential breaches in the escrow company’s email system as the point of entry for the scammers.
This incident, known as business email compromise, has become alarmingly prevalent, with FBI data revealing staggering losses amounting to billions of dollars annually. Despite mandatory reporting of fraud by escrow companies, recourse for victims remains elusive.
Attempts to seek redress from the couple’s escrow company yielded no response, leaving them grappling with the harsh reality of their depleted savings and mounting debt. Forced to borrow from family to salvage their homeownership dreams, they now face the arduous task of repaying borrowed funds, a burden that weighs heavily on their shoulders.
When making a down payment on a home, always confirm wire instructions through direct communication with trusted contacts, avoiding reliance solely on email correspondence. If prompted to call for wire instructions via email, ensure that you dial a known or verified number.
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