Wire Transfer Fraud: Devastating, Convincing and in our Area

We have all heard of those email frauds about a Nigerian prince ready to give away millions if only you will help him cash one check, right? We would never be victims of something so ridiculous! However, a new email fraud is on the rise and it is costing Americans millions: Wire Transfer Fraud. Unfortunately, the targeted population is people buying a home. At Cornerstone Financial we are very glad to say our clients have not been victims of wire transfer fraud, but we did just have a case where a client was targeted. Unfortunately, the scam was very convincing, so we want to warn you and arm you with the knowledge to ensure you don’t become a victim.

Often in a home buying purchase, the buyers will transfer money via wire to their closing attorney or a financial services firm, like Cornerstone Capital. This transaction is usually at the end of the process and fairly close to your closing date, typically 2-3 days ahead of closing. The amount of money transferred will vary due to financing, the amount the buyers want to put down on the house and closing costs, but in most cases it is a very substantial sum. The scam will usually begin when someone posing as a person from your law firm or lender will send you an email regarding instructions for your upcoming wire transfer. They will often have the same email signature as the company they are trying to represent, the logos from that company and a similar email address. We have also seen where multiple fake email addresses are created in order to represent multiple businesses and people at those businesses, all of whom you may know by name, hence how the scam is so convincing. Depending on the quality of the scan, they may even have copies of your closing documents attached to convince you they are legitimate. If you fall victim to this scan and send your funds via the wire transfer instructions provided by the scammers, your money will essentially disappear. Of course local law enforcement and even the FBI will attempt to assist you, but in most cases they are not able to get your money back, at least in time to still purchase your home. This fraud can have a devastating effect on good people, ready to embark on a new chapter, only instead they see their savings and dreams taken right from under them.

So, how do you spot this fraud and report these scammers? If you know what to look for, you will not be a victim.

1. If you receive a new email chain from your law firm or lender, double check the email addresses to ensure they are ones you are familiar with. Even if the names are familiar be sure the exact email addresses are the same.
2. Before you ever transfer any money via wire, be sure to confirm over the phone the instructions with someone you know and trust. Double check account numbers, bank names and routing number. Often the scammers will even have a fake phone number set up that is included in the email, so always call a number that is independent of the email with the wire transfer instructions.
3. Most law firms and/or financial service firms will have a layer of protection on the wire transfer instructions, such as a password or security questions. If this is not in place, consider that a potential indicator that the instructions are not legitimate.
4. When transferring money at your bank, ask them to call the bank that is receiving your wire transfer to verify the account is owned by the company you want to receive your funds. This is a double check that all account and routing information is correct.
5. Lastly, if you do receive an email attempting wire transfer fraud, notify every company involved in your home buying purchase as well as the local authorities. Hopefully with vigilance, this scam will be unsuccessful and these criminals will be put to justice.

As always, if you are worried about wire transfer fraud or any aspect of the home buying purchase, give us a call at Cornerstone Capital Financial Services, we are very happy to help and answer your questions.