Homebuyers losing millions of dollars to frightening scam

Residents can chime in on Henrico's $1.3 billion plan. (Source: File photo)
Residents can chime in on Henrico's $1.3 billion plan. (Source: File photo)
Published: Mar. 14, 2018 at 3:46 PM EDT|Updated: Mar. 19, 2018 at 4:45 PM EDT
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(WWBT) - A frightening new scam is making its way around the country, and the losses in this one are just incredible.

One of the biggest checks you'll ever write is for the down payment on your new house. Now, thieves have figured out how to steal all of that money in a scam that's touched homebuyers around the country.

"Some are doing 20 percent down, and that's a lot of money on a $300,000 property, $400,000 property," said Donna Deaton, a realtor who wants to get the word out about a financially devastating scam reaching homebuyers.

Here's how it works: thieves get into the computers or email accounts of people tied to the home closing process - often title companies. Then, they watch and wait.

When the thieves see a closing coming up, they email the homebuyer, posing as someone from the title company, and say there's been a last-minute change to the closing.

They say the buyer needs to wire that down payment and closing costs money to a new account instead, if they want the closing to happen.

So the buyers wire the money, and then this happens:

"The next thing you know, the title company's calling, going, 'We don't have your money. Where's your money? We can't close without your money,' Buyers say, 'I sent my money. This is where I sent it to.' The title company tends to reply, 'Those are not our wiring instructions,'" said Deaton.

That's when the buyers realize - they've just lost tens of thousands, even hundreds of thousands of dollars to con artists. The odds are that they will never get the money back.

That's because money sent via a wire transfer moves very quickly from your bank to the recipient's. In this case, sophisticated con artists overseas, with just a tiny window of time to stop it.

The usual bank protections for consumers against fraud do not apply to wire transfers.

Be skeptical of any last-minute changes to your closing, and never act on any emailed instructions without verifying everything first with your realtor.

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