According to an article on Inman.com, Real Estate and rental Internet crimes affected 11,300 victims last year and cost victims $150M in losses. That’s up threefold from the prior years according to a 2018 Internet Crime Report from the FBI. This doesn’t include phishing and other types of Internet fraud that may be tangentially related to Real Estate. Florida is one of the top ten states by victim loss. Here are some types of fraud and how to protect yourself.

Escrow Wire Fraud
Escrow wire fraud is one of the biggest risks. Scammers will spoof the title or escrow company by sending instructions on where to wire your funds. Often they have hacked your email server and are watching your emails for signs of a closing. The phone numbers, email addresses and website they use look very similar to the real title or escrow company. Perhaps one letter or number is off so at a casual glance, the info looks legit. When you follow these “updated” instructions, the money goes into an offshore account and the scammers enjoy a nice cruise on your dime.

How to Protect Yourself
An escrow company will NEVER email or text updated wiring instructions to you. Never. Always follow the original instructions provided to you up front by the escrow company. Never click on text or email links or send money without confirming the instructions with a live person on the phone using a number you have previously verified.

If a Home Price is Too Good to be True, It Is
According to Imman.com, a Real Estate agent in Washington D.C. was surprised to learn he was listed on a Zillow ad for a home with a price one tenth of what it should have been. “I first noticed it was a scam due to the incredibly low price,” [he] told Inman. “I then contacted the listing agent whose photos were used and found out that they were posted illegally as a scam.” Once alerted to the scam, Zillow took down the listing.

How to Protect Yourself
Work with a licensed Real Estate agent on all transactions. Don’t be shy about asking for an agent’s license number and verifying it with your local government website. If you are buying property out-of-state, ask a local Realtor you trust for a referral. I am happy to refer buyers and sellers to agents in other states and we have created a network of great agents just for that purpose.

Foreclosure “Relief”
Homeowners that fall on hard times can be desperate to save their homes. Foreclosure records are public and scammers have ready access to info on homes in pre-foreclosure. Scammers will offer to save the home and reduce mortgage payments for a huge upfront fee. Sometimes they will impersonate a government agency or a housing assistance program. If asked, the caller won’t let you talk to your lender; that is a huge red flag.

How to Protect Yourself
Work directly with your mortgage provider to modify your loan, or request forbearance. It is difficult to talk to your lender when you are in this situation, but open communication lines are always best. You can also contact a HUD-accredited housing counselor for help (https://apps.hud.gov/offices/hsg/sfh/hcc/hcs.cfm).

Asking for a Deposit to Hold a House
You find a home at a great price online. When you call the number on the website, you are told it isn’t available for viewing and are asked for a deposit to hold the property. In a competitive market when you find a great buy, you may feel you have to act fast to get your dream home. Of course providing the scammer with a deposit doesn’t hold the home because it is not actually on the market.

How to Protect Yourself
Once again a simple way to protect yourself is to hire a competent local Realtor. We’ll find out whether the deal is real or not. We have quick access to the tax records to find out the particulars of a home. Most counties also offer consumers access to these records, but why not hire an expert?

Final Thoughts
Unfortunately Internet and phone scams are on the rise. Never give out your personal info like SSN or passwords over the phone. If you get an email from a financial institution asking you to update your info, don’t click on the link in the email. Go directly to their website and login to your account. You’ll almost always find out it was a scam.

If you’ve been a victim or know someone who has, post a comment to help others avoid the same issue.

Sources:
Inman.com
“Too smart to fall for a real estate scam? Think again” – Veronika Bondarenko
https://www.inman.com/2019/05/07/too-smart-to-fall-for-a-real-estate-scam-think-again/?utm_source=dailyheadlines&utm_medium=email&utm_campaign=localnewsletter&utm_content=732809_textlink_7_

2018 Internet Crime Report
https://www.ic3.gov/media/annualreport/2018_IC3Report.pdf