Beware of Closing & Wire-Fraud Scams

What it is

Closing and wire-fraud scams are among the costliest frauds in real estate. Fraudsters impersonate a trusted party in your transaction — most often the title company, escrow agent, closing attorney, or real estate agent — and send you fake wiring instructions. If you wire your closing funds (down payment plus closing costs, which can be tens or hundreds of thousands of dollars) to the fraudster’s account, the money is often gone quickly and is very hard to recover.

Both the CFPB and the FBI’s Internet Crime Complaint Center (IC3) warn about this pattern, sometimes called business email compromise or real-estate wire fraud.

How the scam works

1. Reconnaissance. Scammers monitor email — often by compromising an inbox belonging to a party in the deal — and learn your closing date and the people involved.
2. Impersonation. As closing nears, they send an email that looks legitimate: the right names, logos, and transaction details. It may spoof a real address or use a look-alike domain.
3. The switch. The email delivers wiring instructions — or, more dangerously, changes instructions you were already given, citing a “last-minute update,” “new bank,” or “security change.”
4. The wire. You send funds to the fraudster’s account. Because wires settle fast and are hard to reverse, prompt action is critical if it happens.

Red flags

• Any last-minute change to wiring instructions, account numbers, or the receiving bank — this is the single biggest warning sign.
• Pressure and urgency (“wire today or you’ll lose the house”).
• Email-only contact for money movement, or replies that discourage you from calling.
• Slightly off details — a look-alike email domain, unusual phone number, or small changes in wording.
• Requests to keep the change confidential.

The verify-by-phone rule

The core defense recommended by the CFPB and FBI is simple: before sending any wire, verify the instructions by calling a phone number you already know is genuine — one from a document you received in person, the company’s official website, or an earlier verified call. Do not call the number in the suspicious email, and don’t trust wiring details sent or “updated” by email alone. Legitimate closing agents expect this call and won’t be offended.

It also helps to confirm the exact receiving account and to be suspicious of any change, no matter how official it looks.

What to do if you’re targeted or hit

• If you receive suspicious instructions: stop, don’t wire, and verify by phone using a known number.
• If you already wired funds: act immediately.
  • Call your bank right away and ask them to attempt a wire recall or reversal — speed matters.
  • Report it to the FBI’s IC3 (ic3.gov) and to local law enforcement.
  • Notify your title/escrow company and agent so they can alert others in the transaction.
• File a complaint with the CFPB if a financial company was involved.

Fast reporting gives the best chance of freezing or recovering funds.