Buying a home is a complex process for consumers. There are a number of moving parts, many of which may be unfamiliar to them.
Consumers put their trust in the real estate professionals they work with to guide them through that complex process, but that trust is being betrayed by scammers posing as real estate agents, Realtors and title insurance companies to steal consumers’ closing costs.
The Federal Trade Commission and the National Association of Realtors issued a warning Friday to consumers, advising them that they could be the next victim of a mortgage closing cost phishing scheme.
According to the FTC and NAR, scammers are hacking the email accounts of consumers and real estate professionals to obtain information about upcoming real estate transactions.
Once they have access to the consumers or real estate professionals’ email account, the hackers ascertain the closing dates.
Then, the scammers send an email to the buyer, posing as the real estate professional or title company, stating that there has been a “last minute change” to the wiring instructions.
The scammers’ email instructs the buyer to send the funds to a different account, which belongs to the scammers.
According to the FTC, if the buyer takes the bait, their bank account could be cleared out in a “matter of minutes.”
The FTC also said that often time, the buyer will never see that money again.
“If you’re buying a home and get an email with money-wiring instructions, STOP,” the FTC tells consumers in its bulletin. “Email is not a secure way to send financial information, and your real estate professional or title company should know that.”
NAR President Tom Salomone urged homebuyers to be cautious during the home buying process.
“Buying a home should be an exciting event, but sadly an email and money-wiring scam is underway targeting consumers’ sensitive financial information,” Salomone said .
“We’re working with the Federal Trade Commission to shine a bright light on that criminal activity and help protect prospective homeowners,” Salomone said. “Buyers should be wary of sending financial information over email, downloading attachments, or responding to email requests to wire money in a real estate transaction.”
The FTC also provides several tips for consumers to avoid falling victim to phishing schemes like this one, including:
Here's another list on the three things to learn from the New York Federal Reserve Bank hack.