September 26, 2017
E-mail scams can take many forms, but did you realize that an e-mail scam could scuttle your home purchase? The Federal Trade Commission (FTC) recently issued a blog warning homebuyers of a housing-related e-mail fraud that can drain your housing funds.
Thieves initiate the swindle by hacking into the e-mail accounts of homebuyers, real estate agents, and brokers, looking for information on home purchases that are approaching the closing process. Once they have gathered enough information to create a convincing premise and the time is right, the thieves send an e-mail to the buyer pretending to be a party (real estate agent, attorney, title company, or escrow personnel) involved in the closing process.
The e-mail outlines an alleged last-minute change in the closing process
that requires transfer of money to a specific account – for example, claiming that there is a problem with a previously sent check or that a money-wiring destination has changed. The instructions will direct buyers to send funds electronically to a different account used by the scammers.
With a single click, your down payment and closing funds could disappear – along with your dreams of home ownership.
How can you avoid falling for this scam? Start with the basics, by making it more difficult for a scammer to hack into your computer
and obtain the necessary information. Make sure that your anti-virus software is up-to-date and properly maintained. Be wary of e-mail attachments and file downloads, unless you are 100% sure of their origin and nature – they may install malware that can disable or bypass your computer system's security setup. Make sure that your wireless connections are properly secured and protected.
Since you can't prevent hacking on the other end of the home-buying transaction, other precautionary steps are required. Make sure that you understand what to expect during the closing process so that you can more easily spot a fraudulent request. Verify the contact information for your real estate agent or settlement party to use in case you have questions about the financial transaction. Call your designated contact directly to verify that the change requested in any e-mail is real.
It's always best to confirm receipt of any wire/electronic funds transfer with your real estate agent as soon as possible. As an additional measure, contact your bank directly before sending any electronic funds transfer – the bank may be able to spot discrepancies in the request or detect the recipient account as a known participant in previous scams.
If you still manage to fall prey to a closing scam, contact your lender and the wire transfer company immediately to attempt to reverse the transaction. Speed is of the essence.
Follow up with a complaint to the necessary law enforcement agencies. Your state Attorney General's office is a good place to start. By reporting the e-mail scam to the FTC and filing a complaint with the FBI's Internet Crime Complaint Center
, you may be able to save other homebuyers from being scammed.
Don't let an e-mail scam cost you the home of your dreams. Scammers count on you being so confused and exasperated that you blindly go along with their request without giving it a critical review. Don't give them the satisfaction of succeeding. Educate yourself, take the time to verify requests, and make the scammers search elsewhere for unwitting victims.