A little over a year ago, the Federal Trade Commission and the National Association of Realtors issued a warning to people interested in buying a home.
Scammers were posing as real estate agents, Realtors and title insurance companies to steal consumers’ closing costs.
Well, that was last March, but it appears that scammers are still finding new victims to take advantage of because the FTC and NAR issued a new warning about the closing cost phishing scams.
So here’s how the scams work:
Hackers find a way to get into the email accounts of homebuyers, real estate agents, or Realtors. Then, they use that access to obtain information about upcoming real estate transactions.
After that, the hacker sends an email to the homebuyer, pretending to be the real estate agent or the title company that’s being used for the closing.
The email tells the buyer that there has been a last-minute change to the wiring instructions, and instructs the buyer to wire their closing costs to a different account.
But, of course, none of that is true. If the gambit is successful, the buyer sends the money to the scammer’s account, and then the money disappears.
Scams like these have been around for a few years. Last year, the Contra Costa Association of Realtors warned Bay Area homebuyers that they could be targets of similar schemes, one of which cost a local buyer nearly $1 million.
And earlier this year, the American Land Title Association said that the previous warning from the FTC and NAR didn’t do enough to protect consumers and the group wanted the Consumer Financial Protection Bureau to issue a warning of its own.
The scams are becoming so prevalent that the new FTC and NAR warning comes at the request of Sen. Al Franken, D-Minn.
As for what buyers can do about the schemes, the FTC and NAR provide a few tips.
“If you’re buying a home and get an email with money-wiring instructions, STOP,” the FTC and NAR say. “Email is not a secure way to send financial information.”
Instead, the FTC and NAR say that buyers should do the following:
- Contact the company through a number or email address you know is real. Don’t use phone numbers or links in the email.
- Don’t open email attachments, even from someone you know, unless you’re expecting it. Opening attachments can put malware on your computer.
And if you suspect that you’ve already sent money to a scammer, the FTC and NAR advise you to act quickly, and take the following steps:
- If you wired money through your bank, ask them right away for a wire recall. If you used a money transfer company, like Western Union or MoneyGram, call their complaint lines immediately.
- Report your experience to the FTC and to the FBI’s Internet Crime Complaint Center at ic3.gov. Report as soon as you can and give as much information as you can. If your bank asks for a police report, give them a copy of your report to ic3.gov.