Email scammers are targeting prospective homebuyers and stealing hundreds of thousands in down payment cash. If you're thinking of buying a house, here's what to do to avoid getting scammed.

By Zina Kumok
April 27, 2021

It took 34-year-old Shannyn Allan five years to save up for a down payment on a home. And in the span of a few hours, she almost lost it forever due to a scam she never expected.

In 2017, the day before Allan was set to close on her first house, she received an email from her title company with instructions on how to wire her down payment. A few hours later, she received another email with a new account number to wire the money to. Allan tried contacting the title company, but they wouldn't return her calls. They sent another email, asking why she hadn't sent the money and warning her that if she waited too long, her closing might be delayed.

Feeling pressured, she decided to wire the money. A few hours later, the title company contacted her about the money. That's when she discovered that she had wired her entire 20% down payment—$52,000—to scammers. And that it might be gone forever.

Unfortunately, Allan's case is becoming more common. According to the FBI, these scams increased by 480% in 2016 and 13% in 2020. But if you're buying a house soon, there are ways to prevent yourself from becoming a victim. Read on to see how prospective homeowners can avoid following in Allan's footsteps.

woman seated at table working on computer
Credit: 10'000 Hours/Getty Images

How Down Payment Scams Work

To learn your personal details, scammers will hack into a title company's email server and start monitoring messages. When a closing date nears, the scammer sends an email with the wire transfer account number. They might include the number directly in the email or in an attached document.

These scams are carefully crafted—not like your typical fraudulent request asking for hundreds of dollars. As a financial blogger and social media professional, Allan was careful in looking for signs of phishing. "The email looked pretty much identical," she says. "It had all the same signatures and the same metadata and letterhead."

How to Avoid Getting Scammed for Down Payments

Using a certified or cashier's check at closing instead of wiring your money is the most obvious way to avoid this type of scam. Some states, such as Texas and California, let you pay with a check no matter the down payment amount. Other states, like Indiana, only allow checks if the down payment is below a certain threshold. If the down payment exceeds that amount, wiring the money is the only option.

Even if you're legally allowed to bring a check, the title company might pressure you into wiring the money because it's faster. That's what happened to Allan.

If you're required to wire money, get the wire instructions over the phone. Consumers should never rely on an email to verify wire instructions. If you receive an account number via email, contact the company directly and ask them to repeat it over the phone. Most down payment scams happen via email, so talking to a representative directly is the best way to avoid getting scammed.

If your title company is hard to reach, like Allan's, stand firm and say that you can't wire any money until you speak to a representative on the phone.

Eventually, Allan was able to get her money back, and when she shared her story on social media, many people reached out with similar stories. Unfortunately, most of theirs didn't end well. "Of the 10 or so people I heard from, only one got their money back," Allan says. "I heard from one guy who paid $300,000 cash for a house in Florida and lost all of it."

What to Do If You Suspect You've Been Scammed

If you wire money and worry it's gone to the wrong account, call your bank and tell them you need to report a crime. Call as soon as possible, even if you're not 100% certain. Allan said that if she had waited one more hour before calling, she probably would have lost her money forever.  "If it's four hours or more, you may not have a chance," she says. 

That's because the scammers will usually send the stolen funds to a different bank account. Once your money leaves that account, it becomes almost impossible to retrieve. Unlike sending a check or charging a transaction with a credit card, disputing a wire transfer is an uphill battle unless you catch it early. Wire transfers happen much faster than credit or debit card transactions, which makes them harder to stop.

If you contact the bank and they can't get your money back right away, Allan recommends calling the local police department to file a report. Then, contact the FBI's Internet Crime Complaint Center, which handles web crimes like wire scams. Allan says an FBI agent was the main official who helped her retrieve her funds. 

Persistence also pays off. Allan says she called the bank every day for three weeks to figure out how to get her money back. She also reached out to the FBI agent in charge of her case on a regular basis. 

If the worst happens and you fall prey to a down payment scam, don't beat yourself up about it. This is a complex, sophisticated crime, and many title companies neglect to warn their customers about the schemes.

For more information, visit Allan's website She started the site to share her story and provide tips for other victims of real estate scams.


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