Protecting Yourself from a Mortgage Closing Scam
If you're preparing to buy or sell a home, you need to be aware of this threat.
Mortgage closing scams are a growing threat to home buyers and sellers. In fact, wire fraud reported by title companies to the Internet Complaint Center increased 480 percent in 2016. Fraudsters have become more sophisticated in impersonating title companies, real estate agents and lenders, making it easier to steal your money through a fraudulent real estate transaction.
Targeted individuals may receive wire instructions that seem legitimate but have actually been sent by a fraudster. These instructions are often convincing enough that the victims follow the steps to unknowingly wire real estate transaction funds to a fraudulent account, never to be seen again.
Title companies are now doing a better job of communicating the risk to their clients. Your title company, real estate agent, and lender should advise you about what to expect from their money transferring instructions and email communications so you can be confident in the security of your real estate transaction process.
Ways to avoid being scammed:
- Always call to confirm title company contact information and wiring instructions before you transfer funds. Use the phone number and email address from the website or a business card.
- Request your transaction information sheet from the title company.
- Don't reply to email. Forward the message and manually enter the email address to respond.
- Be suspicious of emails notifying you of any changes to wire instructions. Such changes are rare in the course of a transaction.
- Ask your financial institution to review wiring instructions for red flags like discrepancies between account name and beneficiary name. They can also check the receiving ABA routing number and account number against account numbers identified in past consumer fraud complaints.
- Follow title company instructions for using their secure email option. Sending financial information by email without encryption is not secure.
- Use a secure website portal to send any items containing banking or other private information. Mail, overnight service or hand-delivery are also secure options but they could significantly slow the process.
- If you do send email, avoid using financial terms in your email subject lines. See Words to avoid in email subject lines below.
- Be careful not to open email attachments that you aren't expecting, even if you recognize the sender. Opening an attachment could infect your computer or device with malware.
- Don't use free Wi-Fi or public computers for business transactions.
- Create strong passwords and change them regularly.
- Protect your computer with a firewall and up-to-date antivirus/malware software.
- Confirm your wire transfer was received within a few hours of transmitting the wire. If a problem is suspected, report it to law enforcement and your financial institution within 24 hours to increase your chances of recovering the money.
Words to avoid in email subject lines:
- Wire Transfer
Reporting an Incident
Please use the following links to report an incident or to learn more about wire-fraud scams:
If you have any questions, please contact a BECU representative at 800-233-2328.
Video: Protect Your Real Estate Transaction | First American Title Company
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