Wire Fraud Prevention

How wire fraud works

Criminals monitor real estate transactions by compromising email accounts -- often belonging to the buyer, agent, lender, or escrow officer. They watch the transaction progress and, at the moment you are preparing to wire your earnest money deposit or closing funds, they send an email that appears to come from a trusted party with modified wiring instructions. The email looks legitimate. The language is professional. The timing is perfect. And the account number routes your funds directly to the criminal.

In Silicon Valley, where earnest money deposits alone can exceed $100,000 and closing fund wires often reach seven figures, the stakes are extraordinarily high. A single compromised wire can result in the loss of your entire down payment with virtually no chance of recovery.

How to protect yourself

Rule 1: Never trust emailed wiring instructions

This is the most important rule. Legitimate escrow companies will provide wiring instructions through secure portals or in person -- never solely by email. If you receive wiring instructions via email, treat them as potentially compromised regardless of who appears to have sent them.

Rule 2: Always verify by phone

Before wiring any funds, call your escrow officer directly at a phone number you obtained independently -- from the escrow company's website or your original paperwork, never from the email containing the wire instructions. Verbally confirm the routing number, account number, and beneficiary name. This single step prevents the vast majority of wire fraud.

Rule 3: Be suspicious of last-minute changes

If you receive any communication requesting a change to previously provided wiring instructions -- a different bank, a different account number, a different beneficiary -- stop immediately. Do not wire funds until you have independently verified the change by phone with your escrow officer. Legitimate last-minute changes to wiring instructions are extremely rare.

Rule 4: Use secure communication

Avoid sending sensitive financial information (account numbers, Social Security numbers, tax returns) via standard email. If your escrow company offers a secure portal for document exchange, use it. If your agent or lender needs sensitive documents, ask about their secure upload options.

Rule 5: Enable multi-factor authentication

Protect your own email account with multi-factor authentication (MFA). If a criminal gains access to your email, they can monitor your transaction in real time and intercept or forge communications. MFA significantly reduces the risk of email compromise.

Red flags to watch for

• Any email requesting a change to wiring instructions you have already received
• Urgency or pressure to wire funds immediately, before you have time to verify
• Wiring instructions that route to a personal account rather than a business escrow account
• Slight misspellings in email addresses or domain names (e.g., "escr0w" instead of "escrow")
• Instructions to wire funds to an out-of-state or international account
• Requests to use cryptocurrency or non-traditional payment methods

What to do if you suspect fraud

1. Contact your bank immediately. If you have already wired funds and suspect fraud, call your bank's wire department and request a recall. Time is critical -- recalls are most successful within the first 24 to 48 hours.
2. Notify your escrow officer and agent. Alert all parties to the potential compromise so they can secure their communications and warn other clients.
3. File a complaint with the FBI's Internet Crime Complaint Center (IC3) at ic3.gov. This creates a federal record and may assist in fund recovery efforts.
4. Report to local law enforcement. File a police report with your local jurisdiction.

What I do to protect my clients

At the start of every transaction, I establish a clear communication protocol for wiring instructions. I confirm the escrow company's secure delivery method, provide you with verified contact information for your escrow officer, and remind you before every wire to verify instructions by phone. I also coordinate with the escrow company and lender to ensure all parties are following best practices for secure communication.

One phone call to verify wiring instructions takes two minutes. Losing your down payment to wire fraud is permanent. Always verify. Every time. No exceptions.