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  Geebo 8:00 am on August 9, 2024 Permalink | Reply
  Tags: BEC scam ( 5 ), business email compromise ( 11 ), home buying, real estate ( 127 ), Scams ( 1,354 )   

  Protecting your new home from BEC scams 

  

  By Greg Collier

  Finding your dream home can be exhilarating, yet fraught with unexpected challenges. For one Colorado couple, the process took a devastating turn just days before closing on their new home, highlighting a growing threat to homebuyers, the Business Email Compromise (BEC) scam.

  The couple, eager to settle into a family-friendly home, found themselves victims of a sophisticated email scam. Both working in the healthcare field, they were unfamiliar with the nuances of real estate transactions. As they prepared to close the deal, they received emails that seemed to be from their lender and title company. These emails, however, were from a hacker who had infiltrated the email chain, subtly altering the sender’s address to deceive them.

  Despite their efforts to verify the wire transfer through their financial advisor, who diligently contacted their financial institution, the funds vanished. They lost over $30,000, a sum representing years of savings. Though they managed to complete the purchase, their financial plans were put on hold.

  To safeguard against BEC scams, experts recommend maintaining open lines of communication with your realtor or title company through phone calls or in-person meetings. Verifying wire instructions by phone before transferring funds is crucial.

  Title companies often emphasize the importance of wire fraud prevention, promoting awareness of best practices, and encouraging real estate agents to educate buyers early and often.

  Following their loss, the couple filed insurance claims with both their financial institution and the title company. However, both companies denied responsibility.

  This incident should serve as a cautionary tale for anyone involved in real estate transactions. By adopting preventive measures, homebuyers can protect themselves from falling victim to similar scams. Always verify email addresses, confirm wire instructions via phone, and be wary of any unexpected changes in communication.

   

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  Geebo 8:00 am on July 8, 2024 Permalink | Reply
  Tags: BEC scam ( 5 ), business email compromise ( 11 ), home buying, real estate ( 127 ), Scams ( 1,354 )   

  Email scam dupes homebuyers, bank delays refund 

  

  By Greg Collier

  Homebuyers are finding themselves vulnerable to a sophisticated and growing threat: business email exchange (BEC) scams. These cybercrimes exploit the trust and urgency inherent in property purchases by infiltrating email communications between buyers, sellers, and their agents. With access to sensitive information, scammers impersonate legitimate parties to redirect substantial down payments and closing costs into their own accounts. This deceptive tactic not only results in significant financial loss but also disrupts the dream of homeownership for many unsuspecting victims.

  One couple wired $25,000 meant for their home purchase but were tricked into sending it to a scammer. However, TD Bank, which held the scammer’s account, froze the account before the scammer could abscond with the funds. Despite this, more than 20 months later, the couple still don’t have their money back due to a bank delay.

  After nine years in a townhome, the couple decided to buy a single-family home. They found a house and were set to close. They received a legitimate email from their title company. The next day, a scammer impersonating the title company sent an email with new wire instructions, which went unnoticed. They authorized a $25,000 transfer from their Chase account to the scammer’s TD Bank account.

  When the real title company reported not receiving the payment, they realized they had been scammed. They rushed to Chase Bank to recall the wire, but it couldn’t be recalled. Fortunately, TD Bank had frozen the account. They reported the fraud to the FBI through the Internet Crime Complaint Center (IC3). The FBI informed them that TD Bank needed an indemnification letter from Chase to release the funds. After much persistence and involving the Better Business Bureau (BBB), Chase issued the letter.

  However, the letter repeatedly failed to reach the correct hands at TD Bank. Months passed with no resolution, forcing the couple to dig into their retirement savings to make the down payment for the house. It wasn’t until the couple got the local media involved before the letter from Chase finally found the right recipient at TD Bank. The couple is receiving a refund but only for a partial amount.

  Banks should prioritize assisting scam victims promptly and efficiently, minimizing bureaucratic hurdles. The current landscape, where fraudsters can exploit complex financial systems, demands that banks adopt a more proactive and compassionate approach. Simplifying the process for victims to recover their funds and providing clear, supportive guidance can significantly alleviate the emotional and financial stress caused by scams. By reducing red tape, banks can enhance their reputation for customer service and contribute to a more secure and trustworthy financial environment.

  Homebuyers should always verify any payment instructions in person or over the phone to avoid falling victim to BEC scams. Scammers can create convincing emails that appear to be from trusted parties like real estate agents or title companies. To ensure the legitimacy of wire instructions, buyers should contact the issuing party directly using a known, reliable phone number, or visit them in person. This extra step of verification can prevent significant financial loss and provide peace of mind during the homebuying process.

   
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  Geebo 8:00 am on June 12, 2024 Permalink | Reply
  Tags: home buying, real estate ( 127 ), Scams ( 1,354 ), zillow ( 15 )   

  $1M home offered for $10K in scam 

  

  By Greg Collier

  A Kansas City couple recently discovered that their luxurious 5,300-square-foot ranch home had been fraudulently listed for sale on Zillow. The scam became evident when friends began inquiring if they were selling their nearly million-dollar home for a mere $10,200.

  Despite the home’s actual market value being around $1.2 million, the fraudulent listing presented a too-good-to-be-true offer, claiming it was part of a charitable gesture to help first-time buyers. The listing further attempted to restrict access to real estate professionals, lenders, and attorneys, aiming to scam potential buyers directly.

  Unfortunately, this scam is not new. Real estate scammers often list high-value homes for sale online at a fraction of their actual price. They typically claim to own multiple properties and present the low price as a way to assist first-time homebuyers, purportedly for tax benefits. However, these scammers specifically target first-time buyers without representation from a realtor, bank, investor, or attorney. They also request payments through platforms like Venmo or Cash App, adding to the fraudulent nature of the scheme.

  In this instance, in Kansas City, the fraudulent listing invited interested buyers to contact a phone number associated with a Las Vegas area code and requested a $200 advance payment through an online banking app, just to take a tour of the home.

  This led to scam victims knocking on their door, expecting a home tour. The couple’s attempts to resolve the issue included providing proof of ownership to Zillow, yet responses from the site were slow. After the local newspaper became involved, Zillow removed the listing.

  If you’re a first-time homebuyer, remember that a homeowner offering a home at a steep discount for a tax write-off is not a legitimate practice. Anyone making such claims in a real estate listing is likely trying to scam you. Avoid making any payments through platforms like Venmo, Cash App or Zelle, as recovering funds from these platforms is nearly impossible once the payment is made.

  To protect yourself from deceptive property listings, verify information with the county’s tax assessment office. This resource will provide you with the necessary details to identify the legitimate homeowner, ensuring a secure and informed home buying process.

   
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  Geebo 8:00 am on May 31, 2024 Permalink | Reply
  Tags: contract for deed, home buying, real estate ( 127 ), Scams ( 1,354 )   

  Avoiding risky home-buying practices 

  

  By Greg Collier

  For those navigating the home-buying market, it’s crucial to be aware of potential pitfalls, particularly when considering a ‘contract for deed.’ This method involves an agreement where the home buyer makes payments over time directly to the seller, rather than securing a traditional mortgage. While this can seem like an attractive option, it carries significant risks.

  The primary concern with a ‘contract for deed’ is the reduced level of protection for buyers compared to standard mortgages. This makes it easier for unscrupulous individuals to exploit the situation. Minnesota’s Attorney General has issued a warning, emphasizing the need for caution and understanding when entering into such contracts. It is essential to fully understand the terms of a ‘contract for deed’ and to be aware of your rights and responsibilities before signing.

  Ensure that the seller has paid the home’s property taxes and that the property is not in foreclosure. Unpaid taxes or foreclosure status can lead to serious complications down the line.

  Determine if the contract includes a balloon payment, and if so, understand the amount and due date. This lump sum payment can catch buyers off guard and create financial strain.

  Before entering into a contract, have a clear plan to pay off the entire amount. Additionally, account for annual property taxes and maintenance costs.

  Obtain a professional home appraisal and inspection. This step ensures you are not overpaying and that the property is in good condition.

  Be prepared to handle repair costs, property taxes, and general upkeep once the contract is signed. These expenses can add up quickly and need to be factored into your budget.

  Check the interest rate being charged by the seller and compare it with rates from lenders. Ensuring the rate is competitive can save you money in the long run.

  Record the contract with the county recorder’s office within four months of signing. This step may provide additional protections under the law.

  If you find yourself a victim of a scam, report it immediately. Many individuals feel ashamed when they realize they have been scammed, but remember that con artists are skilled professionals. Reporting these incidents helps protect others and can prevent future scams.

  In summary, while a ‘contract for deed’ might seem like a viable alternative to traditional home financing, it comes with substantial risks. Thoroughly understanding the contract and being cautious about the details can help you avoid potential pitfalls and make informed decisions in your home-buying journey.

   
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  Geebo 8:00 am on April 6, 2023 Permalink | Reply
  Tags: BEC scam ( 5 ), business email compromise ( 11 ), home buying, real estate ( 127 ), Scams ( 1,354 ), wire fraud ( 21 ), wire transfer ( 4 )   

  Family loses $160K to home buying scam 

  

  By Greg Collier

  Lately, we’ve noticed an uptick in news stories about the business email compromise scam. While this is only anecdotal evidence, it can mean that scammers are getting better at it, or more people are coming forward about it. Either way, it seems we can expect to see increasing incidents of the BEC scam.

  For those who may not be familiar, the BEC scam is a scam that targets businesses and individuals who regularly perform wire transfers or make large payments via email. In this scam, the attackers use social engineering tactics to trick the victim into sending money to a fraudulent account instead of the intended recipient.

  In the context of buying a house, the BEC scam typically involves impersonating a real estate agent, lawyer, or title company representative. The attacker sends an email that appears to be from one of these legitimate sources and instructs the homebuyer to wire transfer the funds for the down payment or closing costs to a specified account. The email may seem convincing and use language that mimics that of the real estate professional, including branding and logos.

  A family from Ohio recently fell victim to this scam while closing on their home after the husband retired from the military. Since they were a military family, they are familiar with the home buying process. However, in Ohio, it’s required by law to wire any closing costs over $10,000, instead of paying by check. They received an email from who they thought was the title company, and followed the included instructions on where to wire the funds. The transfer was for $160,000. It wasn’t until the next day when the family discovered the title company wasn’t the one who requested the transfer.

  The family contacted their bank, and the wire transfer was stopped before going into the scammer’s account, but the bank is allegedly dragging their feet as far as issuing a refund to the family. This isn’t surprising considering the amount of bank scams we’ve seen where the banks refuse to issue refunds.

  The family was still able to close on their home, but not everyone has that luxury.

  To avoid falling victim to a BEC scam when buying a house, it is important to always verify payment instructions before sending any money. This can involve calling the real estate professional or company to confirm that the account details are correct. Additionally, it is wise to be cautious of emails that seem urgent or that request immediate wire transfers without sufficient verification.