A new Houston doggy daycare business that hasn’t even opened its doors has already lost more than $250,000 in a scam that involves wire fraud and appears to be part of a growing email scheme that has resulted in billions lost.
"I’m always vigilant on things like this, especially in wire transfers, but I never thought it would be happening to me," the business owner and scam victim, who asked not to be identified, told KPRC 2. “It’s been a challenge.”
As a pet owner herself, she has dreamed of opening a business like it but the process has turned into a nightmare that she wants to warn others about.
The business hired a local construction company to get the building in southwest Houston ready to house pets, complete with the kennels and turf. The owner made two successful payments to the construction company via wire transfer.
In September, she received a third invoice.
“I didn’t notice any different from it because it looked like the email address is correct. It was like normal with the attached original invoice,” the business owner said, adding that it came on the construction company’s letterhead and the signature of the account manager she had been dealing with on a new set of wire instructions.
There was one problem: The email address it came from looked nearly identical, but construction was spelled wrong.
“I became L on the construction (part of the email address),” the business owner said.
She didn’t realize before it was too late, after transferring nearly $258,000 to a bank account in North Texas that didn’t pay the construction company bill.
“Sad and shocked. Disbelief. I didn’t think that would be happening to us,” she said.
She reported the loss to her bank and the FBI earlier this month. So far, the case hasn’t been solved and she has no clue who has the money.
It’s a scheme known as a business email compromise, in which criminals send an email that appears to come from a known source making a legitimate request.
Last year, the FBI received 21,489 reports of such compromises, resulting in at least $2,946,830,270 lost.
Over the last decade, business email compromises have resulted in $55,499,915,582 vanishing fraudulently, the FBI announced in this September warning.
“It’s a challenge of finding another $258,000, you know, we have to come up with it from our own resources now,” the business owner said.
It’s dampened the excitement of opening her dream business and changed the way she does business going forward.
“I’ve been writing checks to them instead and hand delivering it instead. That’s the safest way to do it,” she said.
Scammers tried to take the small business for at least $200,000 more in a second attempt, but a different bank caught that and the transaction didn’t proceed.
Recovering money after it disappears in this way isn’t always easy and time is really important. Here’s what the FBI recommends to protect yourself.