Where Did Your Down Payment Go? Take Care to Avoid This Growing Real Estate Scam

Let’s say you just signed the contract to purchase a house and it’s time to send the down payment. You instruct your bank to wire the money to a bank account provided to you by your real estate agent's email. But later you discover your money has vanished.

According to the National Association of Realtors, this nightmare scenario is occurring with increasing frequency through an email hacking scam. Down payments of as much as $100,000 have disappeared.

According to the Federal Trade Commission, hackers infiltrate a real estate agent’s email account, allowing them to track the progress of closing transactions,  hus learning details about the property, title company being used, time and date of closing, amount of escrow funds and more.

When it’s time for you to post earnest money or a down payment, the scammers use your agent’s email account to send you instructions about how much to wire and where to send the funds. Knowing the transaction details, they are able to appear credible. They grab the cash and move the money offshore, where it can’t be traced.

What can you do? Do not act on wiring instructions sent via email. Get necessary instructions from your agent face-to-face or by telephone.

This article originally appeared in Inside personal Finance, April 2017.