These days, you hear a lot about identity theft, electronic funds transfer fraud, and other cyber scams which cost consumers money. The real estate world is not immune to these threats, and consumers who are under-informed leave themselves vulnerable to fraudsters.
While it is important to learn about these scams, you do not need to panic. There are some fairly simple steps you can take to safeguard yourself. Below, I will tell you a little bit more about the typical real estate purchase con, and I will give you some steps you can take to make sure you are protected.
A Typical Scenario
Let’s say that a buyer named John is about to purchase real estate using electronic funds transfer (EFT). John has the money ready and is prepared to complete the transaction on the expected date.
John receives instructions via an email supposedly from his real estate agent, telling him where to send the money. The email looks like it comes from a valid address, and it is formatted just like it always is. He even sees the real estate agent’s logo.
Not suspecting anything is awry, John goes ahead and completes the transaction. Unfortunately, he did not realize that the email was not really from his real estate agent. It was sent by a scammer, and he has transferred his funds to that scammer’s account. Just like that, he has lost hundreds of thousands of dollars.
While this sounds like a scary scenario, there were things John could have done differently. If he had followed the tips which I will share with you below, he would’ve transferred the money safely to his real estate agent.
1. Avoid electronic payments if you can.
First of all, one good way to steer clear of cyber threats like these is to avoid making electronic payments in the first place. Instead, consider paying for your real estate purchase using a cashier’s check. Make sure that you keep your receipt.
2. Ask in person for account and contact details.
Another thing you can do when you first start working with your real estate agent is ask in person for the correct phone number, email address, and account number. You can do the same thing with an escrow-holder.
Throughout the purchase process, make sure that you keep using the same contact details and account numbers. If you receive instructions that include different account numbers, do not use them until you confirm that they are legitimate.
3. Avoid electronic transfers of personal or financial data.
If you need to transfer documentation which includes personal or financial information (i.e. your social security number or bank account number), make sure you do so through an encrypted channel. Better yet, do it face-to-face.
4. When in doubt, ask your real estate agent whether a request is valid.
If you receive a communication or request which you consider to be suspicious, do not take any unnecessary chances. Simply contact your real estate agent using a method that you trust to confirm whether the communication is valid.
5. Follow smart practices to protect your identity in general.
Another good tip to protect yourself while making real estate transactions is not to forget that secure practices in other areas of your life are important as well. Monitor your accounts, set strong passwords and change them regularly, and shop for websites you trust. Closing these loopholes can make you less vulnerable all around.
6. If necessary, take swift action.
If you follow the practices listed above, it is unlikely that you will be the victim of this type of real estate cyber purchase scam. If something does happen, however, there are still actions you can take. You can contact the bank which houses the account and also file a report with the FBI. You may still be able to stop the criminal from getting away with your money.
The threat of cyber crime is real, but so is your power to protect yourself. When you take the right steps, you do not need to be anxious about scammers stealing your real estate purchase money. Have questions or concerns? Contact Maureen Martin at (619) 857-7191.