Scam Steals Closing Money by Hacking Agent, Escrow Email

Deposits necessary to purchase a home are being diverted into hacker accounts, leaving buyers high and dry

  • Scammers are stealing homebuyers’ money by hacking agent and escrow email accounts, monitoring transactions and mimicking official email.
  • Closing costs are being illegally diverted to hacker accounts.
  • The best way to avoid this fraud is to never email money transfer instructions to clients — always call.

Imagine you’re a first-time homebuyer who gets an email from your real estate agent or the escrow or title agency. The email instructs you to wire your closing cost money — which sometimes includes your entire down payment — to a bank account, and the style of communication, signature and email address all belong to someone you know and trust.

That’s the nefarious method some hackers are using to divert buyers’ money into their own bank accounts, potentially leaving the buyer high and dry when the time comes to close the deal and derailing a home purchase for good.

It is a sneaky but simple fraud that experts say is widespread. On Wednesday, Washington Realtors released a video warning about the scam, and on Friday, the Federal Trade Commission (FTC) issued a blog post.

How it works

Thieves hack into a real estate agent or escrow officer email account. They then monitor these accounts through the home closing process and create a perfect mimic of the email style and signature of the agent or officer.

About the time the buyer would normally expect to get instructions for how to transmit closing costs, the hacker sends an email with wiring instructions. Of course, the money goes to the hacker’s account.

This all happens undetected by the escrow officer or the real estate agent.

Washington Realtor legal hotline lawyer Annie Fitzsimmons explains the fraud.

She and other experts says that it is a nationwide problem, though no numbers are available on exactly how many buyers have been duped. Like most cyber financial crimes, there is no aggregated data.

How to prevent it

Hackers “consider the real estate industry to be low-hanging fruit,” said Tom Flanagan, VP of technology at Alain Pinel Realtors.

He explained that they can easily “create inbox rules and filters to hide messages, and they can sit back and monitor the conversation unbeknownst to the agent. The client wires the money into the fake account, which is cleared, and the criminal is never to be seen.”

Flanagan says “these scams occur via phishing and social engineering — not firewall penetration or other traditional hacking techniques.”

He provides these prevention tips for agents:

  • Avoid sending sensitive financial information via email.
  • Use encrypted email.
  • Use 2-step verification or multi-factor authentication to secure email.
  • Have up-to-date antivirus and security apps installed on your computer.
  • Blockchain software and other forms of buyer, agent, seller and escrow officer authentication could prevent this problem.

Precautions buyers can take

National Association of Realtors president, Tom Salomone, released a statement to warn current and potential buyers of the scam.

“Buying a home should be an exciting event, but sadly an email and money-wiring scam is underway targeting consumers’ sensitive financial information. We’re working with the Federal Trade Commission to shine a bright light on that criminal activity and help protect prospective homeowners,” Salomone said.

“Buyers should be wary of sending financial information over email, downloading attachments or responding to email requests to wire money in a real estate transaction. And of course, ‘phishing’ or other suspicious activity should be reported to the Federal Trade Commission.”

In conjunction with NAR’s warnings about the scam, The Federal Trade Commission published an article that lists a number of precautions buyers can take to protect themselves and their money. They are:

  • Don’t email financial information. It’s not secure.
  • If you’re giving your financial information on the Web, make sure the site is secure. Look for a URL that begins with https (the “s” stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the Web address yourself.
  • Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security.
  • Keep your operating system, browser and security software up to date.

Lastly, the FTC reminded buyers who come across these emails to immediately file a report at

Buyers should immediately contact the FTC if they receive a phishing email.

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