Real Estate Wire Fraud in California: How It Works and How to Stop It

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Real estate wire fraud happens when a criminal poses as your escrow officer, title company or agent and sends fake instructions telling you where to wire your deposit or closing funds. The best defense is simple: never act on wiring instructions from an email, text or call alone. Confirm them by phone with your escrow officer at a number you got at the start of the deal, not one printed in the message. If money has already gone out, call your bank right away and ask for a recall, then file a complaint with the FBI’s Internet Crime Complaint Center (IC3).

This guide explains how the scam works, the habits that block it, what to do in the first hour if it happens, and how escrow and title companies tend to handle payments. It’s written for buyers, but sellers face a version of it too.

How the scam works

California’s Department of Real Estate (DRE) has warned buyers, sellers, agents and escrow holders about this scheme in a 2018 alert, reissued in March 2020. DRE describes criminals posing as a party to the deal and sending real-looking instructions, often with authentic logos and personal details. The money lands in the criminal’s account, often overseas.

The Consumer Financial Protection Bureau describes the usual setup in its (now archived) mortgage closing scams post:

1. Someone’s email is compromised. Scammers break into a real estate professional’s email and watch the conversation, so they know your name, the property, the escrow number and the closing date.
2. A spoofed message arrives at the right moment. Right before you send your deposit or closing funds, you get an email that looks like it came from your agent, escrow officer or attorney.
3. The instructions "changed." The message says the account was updated, there’s an audit, or the wire must go out today. The new account belongs to the criminal.

The FBI calls the wider pattern Business Email Compromise. Its IC3 BEC page notes that these schemes often start when a scammer takes over a real business email account. DRE’s November 2025 consumer alert adds two warning signs: unsolicited emails asking you to change payment instructions, and email addresses or domain names that are slightly off.

Where it shows up in a California deal

• Earnest money deposit. Usually wired or delivered within a few days of acceptance. See our earnest money guide.
• Closing funds. The balance of your down payment and costs, sent shortly before close of escrow. Our escrow timeline shows when that happens.
• Seller proceeds and payoffs. A scammer posing as a seller may try to redirect the net proceeds, or send a fake lender payoff demand.
• Phone impersonation. DRE’s June 2026 alert warns about callers posing as DRE staff who push for urgent payments. DRE says its first contact on a matter comes by letter on DRE letterhead, not by phone, text or email.

How to prevent wire fraud: the habits that work

These steps come from the DRE alerts, CFPB and IC3 pages linked above.

1. Collect phone numbers on day one. At the start of the deal, write down your agent’s and escrow officer’s direct phone numbers from a source you trust, such as the signed purchase agreement, the escrow company’s own website, or a meeting in person. CFPB suggests picking two trusted contacts and talking through the payment process with them in person or by phone.
2. Verify every set of instructions by phone. Call your escrow officer at the number you already have and confirm the account name and number before you send anything. Don’t call a number in the email. DRE says not to act on changed instructions you get by email or phone, even if they look real.
3. Treat any change as a red flag. An email saying "new instructions" or "urgent, wire today" should make you stop and call.
4. Consider other ways to pay. DRE lists a cashier’s check, delivered in person with a receipt, as a safer option where it fits. Ask escrow early what they accept and how long a check takes to clear before closing.
5. Keep financial details out of email and text. DRE and CFPB both advise against sending bank account numbers, Social Security numbers or similar information by ordinary email. Use the escrow company’s secure portal or deliver it in person.
6. Lock down your own email. DRE’s 2025 alert recommends multi-factor authentication on accounts used for the transaction. IC3 suggests setting your phone and computer to show full sender addresses.
7. Confirm after you send. Call escrow the same day to confirm they received the funds. A wire that doesn’t show up is your earliest warning.
8. Check who you’re dealing with. You can look up a salesperson or broker with DRE’s license lookup. Independent escrow companies are licensed by the Department of Financial Protection and Innovation (DFPI), which has a regulated-entities search. DFPI has issued alerts, like this November 2025 one, about fake websites posing as licensed escrow companies, so find the phone number through the license record or the paperwork, not a search ad.

What to do right away if you wired money to the wrong account

Speed matters. Every official source above says to act at once, because the chance of stopping or recovering a wire drops as time passes.

1. Call your bank’s fraud line now. Use the number on your card or the bank’s official site. Tell them the wire was fraudulent and ask for a recall (reversal). IC3’s BEC guidance also suggests asking the bank for a Hold Harmless Letter or Letter of Indemnity. Ask the bank to contact the receiving bank.
2. File a complaint with IC3. Go to complaint.ic3.gov and include the banking details: your bank, the receiving bank, account numbers, amounts, dates and the fraudulent emails. DRE’s alerts also mention contacting a local FBI office.
3. Call your escrow officer and agent at their known numbers. They need to know right away. Their email may be compromised, and the closing date may need to change.
4. Keep everything. Save the emails with full headers, texts, wire receipts and call logs. Don’t delete the messages or reply to the scammer.
5. Secure your accounts. Change your email password, turn on multi-factor authentication and check for forwarding rules you didn’t set up.
6. Report to the right regulator. If a real estate licensee is involved, DRE takes complaints through its complaint page. For an escrow company, use DFPI’s complaint page.
7. Talk to a California real estate attorney about your purchase contract deadlines and any claims. This guide can’t tell you who bears the loss. That depends on the facts and your contracts.

Who to contact, and for what

How escrow and title companies usually handle payments

What follows is common industry practice, not a legal requirement, and it varies by company. Ask your escrow officer how their office works.

• A warning at the start. Many escrow and title companies send a wire fraud notice when escrow opens, saying they won’t change instructions by email. California REALTORS® also publishes a Wire Fraud Advisory form that agents often give clients (an industry form, not a state rule).
• Secure portals. Many offices deliver wiring instructions and collect documents through an encrypted portal rather than plain email.
• Call-back checks on payouts. Before releasing seller proceeds or paying off a loan, many escrow offices call to verify instructions at a number already on file.
• In-person or notarized steps. Signing usually happens with a notary, which is another chance to confirm payment details face to face.

If your escrow office does something different, that’s not automatically wrong. The phone call to a number you trust is still your check.

For sellers

Sellers are targets too. A scammer may email escrow pretending to be you and ask that your proceeds go to a "new" account. Give escrow your payout instructions in person or through their secure portal, and tell them you’ll never change them by email. Ask how they’ll verify. If you’re selling a home you don’t live in, such as a rental or inherited house, DRE’s 2025 alert suggests checking county property records for unauthorized transfers and signing up for a recorder’s deed notification program if your county has one. For seller costs and timing, see our seller net sheet guide.

If you’re buying a home or selling one with us, ask us at the start for the escrow officer’s direct line, and call before every wire. First-time buyers can find the rest of the process in our first-time home buyer guide. Questions mid-escrow? Contact us by phone.

Questions people ask

Can wire fraud money be recovered?

Sometimes, but not reliably. IC3 says acting quickly by calling your bank and asking for a recall may reduce or eliminate the loss. The longer you wait, the less likely it is that the money is still in the receiving account.

Is it safer to pay by cashier’s check?

DRE lists a cashier’s check delivered in person, with a receipt, as a safer alternative to wiring. Ask your escrow officer whether they accept one for your amount and how long it takes to clear before your closing date.

Will my escrow company ever change its wiring instructions by email?

Many escrow companies say in writing at the start of escrow that they won’t. Either way, treat any emailed change as suspect and call escrow at the number you already have before you send money.

Who do I report real estate wire fraud to in California?

Call your bank first, then file with the FBI’s IC3. If a real estate licensee is involved, you can also file with DRE. For an escrow company, file with DFPI.

How can I tell if an email from escrow is fake?

You often can’t tell by looking. DRE warns about domain names that are slightly off, and IC3 suggests setting your devices to show full sender addresses. The reliable test is a phone call to a number you got on your own.

Does title insurance cover wire fraud losses?

Don’t count on it. A standard owner’s policy protects you against covered title defects. Losing your own funds before closing is a different kind of loss. Ask the title company in writing what its policy and any closing protection coverage include. Our title insurance guide covers what a policy does.

Does DRE ever call to demand payment?

DRE’s June 2026 alert says its first contact on a matter comes by letter on DRE letterhead, not by phone, text or email. Hang up and contact DRE through its official site.

Sources & notes

1. California DRE, "Buyer, Seller, Agent and Escrow Holder BEWARE: Wire Fraud" (October 2018): how the scheme works, four prevention steps, contact bank and FBI/IC3.
2. California DRE, Wire Fraud second alert (reissued March 2020).
3. California DRE Consumer Alert, real estate and mortgage crimes (November 2025): BEC, verifying instructions by phone, multi-factor authentication, deed and title fraud.
4. California DRE Consumer Alert, phone scams posing as DRE (June 23, 2026).
5. California DRE, File a Complaint and Verify a License.
6. FBI IC3, Business Email Compromise: prevention tips; contact bank, request recall, file at IC3.
7. FBI IC3 home and complaint site.
8. CFPB, "Mortgage closing scams: How to protect yourself and your closing funds". CFPB marks this page as archived; some details may be dated.
9. California DFPI alert on fake escrow websites (November 21, 2025), regulated-entities search and complaint page.

Escrow and title practices described above are common practice, not law, and vary by company. Title insurance coverage depends on the policy and any endorsements; ask the title company. Federal Trade Commission consumer pages couldn’t be opened for this review and aren’t relied on here.

General information, not legal, tax or lending advice. Updated November 2026. Primary sources are linked in this guide.

Related: California escrow timeline · Earnest money deposits · Who pays closing costs