Buying a home can be a stressful, nerve-wracking experience under the best of circumstances. If you’re nearing closing on a new home, don’t let that stress make you vulnerable a dangerous new home buying scam.
There have been numerous incidents across the country in recent months in which a hacker impersonates a real estate agent and steals the buyer’s money intended for down payment and closing costs.
The hacker targets a real estate office’s network, typically one that handles high price sales in which the buyer is putting down tens of thousands of dollars.
Once inside the network, the hacker finds out what properties are coming up for closing and obtains the email addresses of the buyers.
Change in bank routing number
Just before the closing date, the hacker (using the real estate agent’s email address) contacts the buyers to inform them there is a new routing number for the deposit of their funds.
The new routing number is for an offshore bank, and if the victim wires the money, there is no way to get it back.
Jessica Edgerton, associate counsel for the National Association of Realtors (NAR) says anyone who scans the headlines knows cybercrime is a global problem that is growing daily.
“What we might not be aware of at this time is that it is not just government agencies and banks that are the target,” Edgerton said.
Close call in San Diego
CNBC reports a San Diego homebuyer nearly lost $100,000 to this scam when he received one of these fake emails. The only thing that saved him was his credit union said it couldn’t make the switch in time.
When the would-be victim called his agent to tell her he couldn’t change the routing number in time for the scheduled closing, he learned there was no change in the routing number.
Therein lies the only way to avoid this scam: you can’t trust the contents of an email without verifying it.
Among Edgerton’s security advice is to confirm with your Realtor or title company any changes to the closing procedures. Don’t rely on phone numbers in what could be a fake email — look up the number yourself.
Exercise good cyber security
Another wise practice to protect yourself is to refrain from transmitting personal information on an unsecured Wi-Fi network. For instance, don’t correspond with your real estate agent about a nearing closing using the coffee shop’s Wi-Fi.
“Beyond setting your computer on fire and burying it in your backyard, perfect security does not exist,” Edgerton said. “But don’t freak out. What you can do is be proactive, be educated and use the tools and resources at your disposal to protect yourself.”
The above was first reported by the fine people at Consumer Affairs.