SCAM-PROOF YOUR ASSETS

 Maybe the most insidious of all scams is the one that happens right in the zenith

of your happiness, the one that capitalizes on your life’s work and your hopes

and your investment in what most think of as the American Dream.

You’ve just gone through the exhaustive process

of walking through homes, let a bunch of strangers

pore over and judge your credit and spending

habits, endured weeks of inspections and

incessant phone calls, and experienced highs and

lows in which your payment went up, down, up,

and down again.

You’ve packed all your belongings, put your

property on the market, experiencing the

exhaustion from both sides of the table. You’ve carefully determined how much of your life savings

you can spend on a down payment, dotted every

i and crossed every t, and the day has come to

finally, finally pay them that money, get your keys,

and take possession of your new home.

Then the crushing truth hits you like a brick wall:

That life savings has been taken from right under

your nose, with your own blessing even, and

there’s no way to get it back.

WHAT IS FINANCIAL INSTITUTION

FRAUD (FIF)?

According to the Federal Trade Commission, bank

and lender fraud was the sixth most frequently

reported fraud of 2019, with almost 150,000

reports that year alone. An increasing number

of them target financial institutions. The FBI calls

these FIFs—Financial Institution Frauds.

These schemes involve the misappropriation of

customer accounts and personal information for

use in identity thefts, and consumers always end

up the unwitting victims.

Fraudsters performing these acts may be acting on

the outside, but they also may be working on the

inside. About 70% of identity theft starts with an

employee stealing information from his or her own

company, and 6 out of 10 American companies

and government agencies have been hacked.

FIFs may include the following scams, which are

seen with alarming regularity by the FBI:

• Stolen or counterfeit checks

• Account fraud or identity theft

• Credit/debit card fraud

• Email hacking leading to financial loss

And although FDIC backing ensures that banks will

perform due diligence and prevents some amount

of fraud, the unfortunate truth is that scammers are

just really good these days, and technology makes

them even better at getting away with it.

HOMEBUYER FRAUD IS SKYROCKETING

The amount of home buyer fraud alone has

skyrocketed lately; according to the FBI’s IC3 office,

9,645 prospective home buyers lost nearly $1 billion

in 2017 alone due to wire fraud situations and that

number is way up from the mere $19 million lost just a

year prior.

In other words, about $2.65 million in real estate

funds were stolen from home buyers every day. And

the FBI reports that email compromise scams like this

are a $12 billion (and growing) industry.

Any time you plan to make a major purchase with

high dollar figures involved, you run the risk of

encountering a scammer who wants to hijack your

dreams.

A woman in San Jose—who chose to remain

anonymous in the fallout of her loss—approached

retirement and was looking to downsize. She found

a home that met her needs and agreed to put

$400,000 down on the new house. But when it came

time to send the down payment, she received emails

from a scammer that appeared to have come from

both the real estate agent and the title company.

The messages said that the seller had changed the

purchase agreement and instructed her to wire all the

money rather than getting a cashier’s check. She did

as she was told and realized, just two hours later, that

the money she’d spent ten years accumulating had

vanished.

Even that loss is small compared to the $1.57 million

lost by a Washington, D.C., couple whose transfer

of settlement funds was diverted to a hacker’s own

account when the thief broke into the title and

escrow company’s email system.

Hackers are finding openings in title companies’

or realtors’ email accounts to track upcoming

purchases that are scheduled to close—the higher

the price, the better—and then appear to be

those trusted sources to provide fraudulent wiring

instructions that the recipient will believe. Then

the funds go directly to the scammer’s own bank

account, which is promptly emptied and closed, then

gone without a trace. Shouldn’t the government

actively pursue such criminals?

The Denver couple has hired an attorney to

sue their title agency, real estate agency, and

mortgage lender for negligence and other

transgressions, under a little-known caveat

known as the Financial Fraud Kill Chain. Under

this rule, the FBI may be able to stop a transfer

and recover lost funds exceeding $50,000 if

the transfer is sent internationally, the bank

issues a recall notice, and the FBI is alerted

within 72 hours.

WHAT YOU CAN DO

The bottom line is to exercise abundant, even

excessive caution when engaging in a large

financial transaction of any kind. A home

purchase involves putting every one of your

personal financial details on the table, so you’re

always at risk at every step of the way.

When I buy real estate, I get a cashier’s check

from my bank and drive it directly to the title

office. The $5 check fee and a little gas are

safer for me than any wire transaction would be.

https://learn.american-apartment-owners-association.org/link/756638/56/