The scam begins when a thief gains access to an e-mail account of one of these legitimate real estate, title, or lending companies through hacking. Once inside the e-mail account, they have access to all communication between buyers, sellers, agents, title companies, and lenders. The thief can see scheduled closing dates, and they now have access to private financial information regarding the sales.

Using this information, the thief chooses a sale that is approaching its closing date. The thief creates an e-mail that appears identical to one from the legitimate company. That e-mail is then sent to the buyer at the last minute, changing the payment information for the closing funds to the thief’s wire destination. If this information is followed and the money sent to the scammer’s new destination, the buyer will often have no idea anything has gone wrong until they are contacted by one of the companies asking about the missing payment. Meanwhile, the thief will move the funds and move on, before anyone is the wiser.

In some cases, victims have sent their intended closing costs or even the full payment for their new house to these fraudulent wire accounts. In 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs resulting from this scam. And the buyer is on the line for the lost funds—there is often little to no recourse for victims of this scam. Therefore, avoiding it is paramount.

• Identify two trusted individuals to confirm the closing process and payment instructions. Ahead of your mortgage closing, discuss in person, or by phone, the closing process and money transfer protocols with these trusted individuals (realtor, settlement agent, etc.). Be cautious about exchanging any details about your closing over e-mail. You may want to use this opportunity to also create a code phrase, known only by these trusted parties, if you need a secure way to confirm their identities in the future. 
• Write down their names and contact information. 
• Before wiring money, always confirm instructions with your trusted representatives. Never follow instructions contained in an e-mail. Verify the closing instructions, including the account name and number, with your trusted representatives either in person or by using the phone number you previously agreed to.
• Avoid using phone numbers or links in an e-mail. Again, scammers can closely replicate the email address, phone number and format of an exchange from your agents. Avoid clicking on any links or downloading attachments without first confirming with your trusted representatives.
• Do NOT e-mail financial information. E-mail is never a secure way to send financial information. 
• Be mindful of phone conversations. It may be difficult to identify whether a phone call is fraudulent or legitimate. Scammers may call and ask you to verify your personal or financial information. When in doubt, always initiate a call back to your trusted professionals to confirm whether it’s legitimate.