“This Scam Almost Cost My Client $80,000”

“This Scam Almost Cost My Client $80,000”

 

 

I got a call from my client the day before their closing. They told me that they couldn’t wire their $80,000 down payment to the attorney. They said the number that the attorney emailed them was ONE digit off according to their bank.

 

I immediately knew this was a problem when they told me that the attorney told them to wire the down payment. I immediately set up a three way call between them and the attorney. I had them tell the attorney what they told me. The attorney immediately said she never sent the email.

 

She asked that they send copies of the related emails to both of us. The attorney’s email account had been hacked and these clients came within one digit of being scammed for $80,000.

 

The state police were immediately called and I’m not sure who else. There have been interviews and reports that needed to be filed, the email account shut down and a new one set up.

 

These buyers and the attorney were pretty shook up and understandably so as emails and accounts get hacked all the time. We need to pay attention.

 

My learning from all this, I will do an even better job explaining the process to my clients and hopefully each will listen to insure nothing like this happens again. Can you imagine if the wire had gone through? They would not have closed on their home.

 

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 61 commentsJoe Petrowsky • June 21 2016 06:24AM

Comments

Your clients were very fortunate to have not had the wire go through Joe Petrowsky  .  Scary how easy a thief can steal from the unsuspecting public.

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek & Associates LLC Team) over 1 year ago

Good Morning Joe - thank goodness for the sloppiness of this scammer.  Wiring 80,000 by email does not sound correct to begin with.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) over 1 year ago

Now that was a close one.  I'm so glad things worked out and they saved their money and their house.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) over 1 year ago

Oh MY! Thank goodness that was caught before it was too late. That is so scary.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) over 1 year ago

Hi Joe.  This scam has been going on for a while now.  I need to remember to warn all of my clients to double check before wiring any money.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 1 year ago

This is a good reminder to discuss with clients. It has happened a few times in my area. Scary!

Posted by Chrissi Chapman Topoleski, HOME~There is no place like it! (Re/Max Real Estate Connections) over 1 year ago

I am glad I read this post. I can't imagine this happening. I will share this with others.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) over 1 year ago

Good morning Joe.  Thankfully it turned out the way it did.  The criminal element just doesn't give up do they?

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty AR LLC) over 1 year ago

Good morning Joe. The culprits need to have their hands placed on an anvil and hit with a 4 pound hammer to get their attention! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker (Wayne M Martin) over 1 year ago

Good morning, this has become so common that we need to become the center of our transactions since many buyers are not always in tune to these scams.

Posted by Donald Urschalitz, P.A. Realtor ABR RSPS North Palm Beach County (One World Realty Inc.) over 1 year ago

Joe Petrowsky - we use escrow companies in AZ and most have changed their procedures due to these scammers. The scammers make all of our jobs more difficult.  I am constantly getting emails from all types of companies that any one of us may use on a regular basis. All are fabrications. LinkedIn is the latest company.  We have to be so vigilant. 

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) over 1 year ago

Oh my, this is such an important message for consumers and lucky this client was on your radar...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) over 1 year ago

Hi Joe Petrowsky I ALWAYS tell my clients to ONLY  wire money to the Title Company.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) over 1 year ago

Hi Joe  --- there has been an uptick in wire scams via phony email communications -- scary stuff.  I'm glad your clients were not harmed.  

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) over 1 year ago

Joe,

What a crazy scenario.  Ron was just saying that he is foreseeing that email communication is going to die out, because either people don't read them, or the scammers are trying to catch those unaware...Glad your clients came out unscathed.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding and Marketing (Napa Consultants) over 1 year ago

Good afternoon Joe and great catch. How very very scary. I try to keep all essential information off the computer: email especially.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) over 1 year ago

Close call!  Can't believe the types of fraud that are out there, and they're making our job more & more difficult each day

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) over 1 year ago

This is happening all over the place. I'm constantly getting emails asking me to login in to dropbox for closing docs and such. I'm glad your clients weren't scammed. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) over 1 year ago

Joe

Your right if their  e-mail went through they would have lost $80,000 . . . . Good pick up.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 1 year ago

Joe this wiring the closing funds scam has been around for a little while now, and unfortunately some have fallen for it.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 1 year ago

I have heard of this scam before, though I don't know anyone that had it happen. Thankfully!

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) over 1 year ago

Joe amazing how these scammers work... good thing you were on top of your game, Now our Escrow Companies do not do attachments and there is a discussion before money is wired...Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 1 year ago

Joe

Whew, close call! This is becoming a huge problem. Our escrow companies all now are sending encrypted wiring instructions, many with 2-step verifications. We always verify before the buyers wire their funds. 

Jeff

 

Posted by Jeff Dowler, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) over 1 year ago

Far too many of these scammers out there, I wonder why law enforcement does not take these seriously and "follow the money".

Posted by Bob Crane, Forestland Experts! 715-204-9671 (Woodland Management Service / Woodland Real Estate, Keller Williams fox cities) over 1 year ago

Joe Petrowsky - now this is something that I tell my buyers - all checks should be handed over to me...

Safety first....thank God nothing happened to your clients....

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) over 1 year ago

Missed this, Joe but thanks to Bob Crane I had a 2nd opportunity! That was a close call. These scammers are pretty darn smart and many of them understand the closing process. Brokers and buyers and sellers may not like all the security now applied via email that our title & escrow business is now using, but we're forced to use it because of exactly what you're posting about. Glad your clients contacted you beforehand and didn't get burned. I'm witness to several that have, and once they have that $$$ it's wired all over the planet within minutes and gone!

Posted by Rene Fabre, New Media Marketing (First American Title) over 1 year ago

I had to wire money for a large furniture purchase overseas the other day. I will tell you that I spent so long pouring over the paperwork from the bank because of the line that says that if any of the information was wrong it could cost me the entire balance of wired funds. Mine wasn't even close to $80K, but it was big enough to make me read and re-read. 

Posted by Melissa Marro, Jacksonville Real Estate and Home Staging (Keller Williams First Coast Realty - The Marro Team) over 1 year ago

Joe Petrowsky We always check and double check before we wire any funds.  I'm sure your clients and and their attorney were very happy with you.  Good thing you caught it.  Happy 4th!

Posted by Elyse Berman, PA, CRS, Pet-Friendly Realtor, 561-716-7824 (Realty Associates Florida Properties) over 1 year ago

Holy Quacamole!  Good thing they called you.  How someone managed to do that and create all of this drama during a home purchase is amazing to me. Great job Joe!

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) over 1 year ago

Joe, I've started to tell my clients under no circumstances should they wire money for settlement.  It's just too risky.  So we do it the old fashioned way - going to the bank before settlement to get a certified check.

I'm really glad you caught this.  The bad guys are probably on another continent.

Posted by Patricia Kennedy, For Your Home in the Capital (Evers & Company Real Estate, Inc.) over 1 year ago

Thank you for the heads up. Sadly, some have resorted to this sort of crime. You have to be alert.... I did receive similar emails on some of my transactions.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale Real Estate (AZuRE Team - Realty ONE Group) over 1 year ago

Wow.  Scary stuff.

Nevada is a 'good funds' state, so we pretty much we pretty much wire everything when it is near closing.  Funds go to the title company, they encrypt the message with the wire instruction.  I guess the crooks will figure out a way to bypass that eventually.

Posted by Virginia Hepp - Mesquite NV REALTOR, Mesquite NV Homes and Neighborhoods - Search MLS (ERA - Mesquite NV Homes For Sale) over 1 year ago

Interesting tale about a hack.  Wonder how wiring instructions could be provided to the buyer directly, and have their bank take care of it directly.  Wire instructions go out to the client, they go to their bank and set it up.  Bank wires funds into the escrow account.  No back and forth emails with account numbers.

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 1 year ago

Wow! that  was close!  Scammers today are everywhere.... they are doing this to title companies too... so glad your clients were not harmed by this... Wow!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) over 1 year ago

Happy to hear things worked out, it could have been disastrous for sure Joe Petrowsky . I love to explain everything to my client ahead and always remind them to call if the question anything. 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) over 1 year ago

Joe- unfortunately this is not the first time I've read about a scam such as this.  I'm hoping that agents will make it a point to educate their clients about the process.  And as Patricia Kennedy does, let clients know what they are not to do. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) over 1 year ago

This truly is a scary situation and time we live in. There is so much for ill intentioned people to be able to prey upon. I'm glad to hear things worked out for your client.

Posted by J.R. Schloemer, CRS (Kentucky Select Properties) over 1 year ago

A very timely post Joe, thank you. In our market the closing attorneys only accept funds by wire, with the possible exception of amounts under $5000. My personal rule is to not be involved in the transfer chain - communications must be between the attorney (secure account) and the Buyer. 

Posted by Jim Harper (Atlanta Communities Real Estate ) over 1 year ago

Joe Petrowsky Great catch and what a mess that would have been. Good to remember though. 

Have an awesome 4th.

Posted by Donald Hester, NCW Home Inspections, LLC (NCW Home Inspections, LLC) over 1 year ago

My listings got hacked as real estate rental on Craigslist.  First time I though kids made it up.  When I searched no joking it was real.

Posted by Sam Shueh, mba, cdpe, reopro, pe ( (408) 425-1601) over 1 year ago

I wrote about a similar situation a few months ago. The answer is NOT to send sensitive information via email. That would include bank account numbers, social security numbers, etc. 

Pick up the phone or send a certified letter. 

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) over 1 year ago

Thank goodness your client's $80K didn't end up in the thieve's account.The attorneys at the California Association of Realtors have been warning us about that scam and one of my last AR posts was about it.

Posted by Lloyd over 1 year ago

Geez Joe.  This is scary stuff.  Good ending.  Scary none the less.  Mark

Posted by Mark Don McInnes, Sandpoint, North Idaho Real Estate - 208-255.6227 over 1 year ago

To avoid scams, I have gone old school. I get wiring instructions faxed to me from the attorney and get account numbers and social security numbers verbally form my clients. Then I fax to the attorney. Everything is done without the internet to avoid any chance of a scam.

Posted by Bill Balatow, Iredell-Lake Norman Real Estate (Allen Tate) over 1 year ago

Good morning, Joe... I posted a video on how to avoid wire scams not all that long ago. It's really crazy what's going on out there. We need to stay vigilant all the time.

Posted by Nina Hollander, Your Charlotte/Waxhaw/Fort Mill Area Realtor (RE/MAX Executive | Charlotte, NC) over 1 year ago

That is really huge Joe.  Imagine the heartache and definitive end to that money had the transfer worked!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 1 year ago

Good morning Joe Petrowsky ,

We have been hearing there are so many scams that our Coldwell Banker United company has a new disclosure for us to give to our clients and have signed warning them about wiring their money and to only talk to the escrow officer directly before wiring! So glad your clients didn't loose the $80,000!! Quick thinking Joe!

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) over 1 year ago

Good post, I have heard from others about this type of action. We should all be extra careful about wiring funds for starters...

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) over 1 year ago

I had a client that intercepted email communication between the seller and buyer regarding furniture. They lost $12,000. The police found the people who scammed her and said they could not do anything, because the funds had been sent to the name of the crook. Unbelievable.

Posted by Matt Brady, Lending With Competence And Character (Skyline Home Loans) over 1 year ago

Just goes to show everyone is a target of scamming and you need to be careful of the emails you recieve.

Posted by Jennifer Mackay, Your Bay County Florida Realtor 850.774.6582 (Keller Williams Success Realty) over 1 year ago

They have to think of a better way to give out those wire instructions. This is a rampant scam & you'd think after the last couple of years - someone would figure out a better way.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) over 1 year ago

Thanks for the heads up. I will be more alert for this kind of possibility.

Posted by Thomas McCombs (Century 21 HomeStar) over 1 year ago

Scary situation. Every time wiring money comes up I am a bit nervous!

Posted by Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC, ... a small office, delivering big service! (Waters Realty of Brevard, LLC) over 1 year ago


Unfortunately this has become a ongoing problem.  Our board  recently had a CE class with agents from the local FBI office.  They recommended filing a notice at www.IC3.gov the internet crimes division and in the case of actual loss to contact your local FBI office in addition to local authorities as soon as possible.

Posted by Brent Diebert, A Community Lender, Where Family’s Come First (First Financial Bank NMLS 461421) over 1 year ago

Thanks Joe. If it smells like a rat it probably is. Glad you caught it!

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) over 1 year ago

Joe - your quick action saved the day!... and money.

Posted by Olga Simoncelli, CONSULTANT, Real Estate Services & Risk Management (Veritas Prime, LLC dba Veritas Prime Real Estate) over 1 year ago

Joe, Once the funds are wired into the fraudster account ... there ain't no turning back. Money gone! 

I had issues earlier this year with my commission wires. I prefer my commission be wired into my account ... three wires were set in January - two on the same day and one a day later.  My bank was blowing up my phone asking me every detail ... what was it for, the amount, when scheduled to wire. who was it from.  I had to go into my bank to resolve - show my identity and ensure they allowed the wires to my account.  While I was there I got a real eye opener on the magnitude of wire fraud.  Scary stuff!

Posted by Kathleen Daniels, San Jose Homes for Sale - Probate Broker (KD Realty - 408.972.1822) over 1 year ago

All the technology and convenience of emails and wiring instructions can come at a cost...scary!

Posted by Raul Rodriguez, Looking out for the client's interest and not my p (Covenant Partners Realty) over 1 year ago

This has been happing a lot in my market (San Francisco/ Bay Area), so much so that we now have a Wire Fraud disclosure for buyers and sellers to sign to make sure they are informed. Crooks are getting info from unecrypted emails, then creating a "spoof" email that looks legit but has a different account/ wire # so the money goes directly to them. Always have your clients call the person/ entity they are wiring to and confirm the account# before wiring.

http://speakingofrealestate.blogs.realtor.org/2015/05/19/alert-wire-fraudsters-targeting-real-estate-transactions/

Posted by Debra Donovan, San Francisco Real Estate (Transpac Real Estate) over 1 year ago

Both our local Escrow companies have a disclaimer on the bottom of their emails. Sad that this is happening. So glad your clients caught it!

Posted by Tammy Adams ~ Realtor / Podcaster, A Maricopa Agent who Works, Lives & Loves Maricopa (Maricopa Real Estate Co) over 1 year ago

This is terrifying. All participants that work in this industry- whether it is agents, lawyers, contractors, etc- should be thinking how a hacker could impact their business.

Posted by Adam Feinberg, NYC Condo, Co-op, and Townhouse specialist (ANCHOR ASSOCIATES) over 1 year ago

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