T
hree days before closing on his Chicago-area condo in September, Cullen Brown received an email with down payment wiring directions from the title company. However, the instructions were fake, and Brown had wired nearly $60,000 to the wrong place, falling victim to a sophisticated real estate scam known as "business email compromise" or BEC.

    The FBI reports that BEC scams have grown more common as communication for business transactions moves online. Experts warn that new technologies like artificial intelligence and faster payment products make it harder to detect and track down these schemes. Brown's supposed title company email looked legitimate, including his name, address, and the amount of money he owed.

    The FBI received 21,489 BEC complaints with adjusted losses of over $2.9 billion in 2023, making business email compromise the second-costliest type of crime last year. Professor Michael Chapple notes that people often don't heed warnings about this type of attack or find it too convincing to be legitimate.

    Brown caught the fraud quickly when his attorney called to confirm receipt of the payment. He believes the criminals hacked the title company's email to get his personal information. A survey by CertifID found that over half of homebuyers and sellers were only "somewhat" or "not aware" of fraud risks.

    Ritu Tirthani, a Nashville resident, was also tricked into wiring her down payment to scammers in August. She didn't learn about the con for an entire day until she received a call from the banker saying they hadn't received the wire yet. Advances in technology have increased the risk of real estate fraud, with AI helping criminals communicate more effectively and the Federal Reserve's FedNow instant payment feature compressing the window to recover fraudulent payments.

    Real estate is especially vulnerable to fraud due to publicly available property listings data and large sums of money involved in transactions. Both Brown and Tirthani were able to recoup their money and close on their homes with help from CertifID and the FBI, respectively. However, many other victims don't get their money back at all.

    Real estate agent Joan Rogers has taken extra precautions with buyers and sellers after a deal she worked on was nearly scuttled when a homebuyer was tricked into wiring $500,000 to scammers. She advises clients to copy her on incoming emails and not open them unless cleared by her first. Homebuyers and sellers should look for red flags among the flurry of emails and communication around a home's closing, such as unexpected changes in payment amounts or instructions.

    Cliff Steinhauer, director of information security at the National Cybersecurity Alliance, advises picking up the phone to validate information and not calling numbers included in emails, which can be spoofed. If you suspect a wire scam, contact the police and your bank immediately.