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Homebuyer Scam: Beware Wiring Closing Costs

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By Christopher Coble, Esq. on April 08, 2016 2:00 PM

You found the perfect home. You negotiated a good price. You signed all the paperwork. All that's left is to wire the closing costs and you'll be good to move in. But you might want to be careful about that last part -- a new scam has hackers intercepting closing costs and ruining new homeowners' dreams.

Fortunately, these scams can be avoided, if you're careful.

Beware the Bogus Email

The Federal Trade Commission issued a warning about the scam this month, and described it like this:

Hackers have been breaking into some consumers' and real estate professionals' email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last minute change to the wiring instructions, and tells the buyer to wire closing costs to a different account. But it's the scammer's account. If the buyer takes the bait, their bank account could be cleared out in a matter of minutes.

Poof, there go your closing costs, and potentially, your new home. The FTC notes that most people roped in by the scammers never see that money again. And if you can't afford to pay those fees twice, you could lose your house.

Gone Phishing

This type of scam is known as "phishing" -- where a scammer with a little information uses it to pry more sensitive personal or financial information from you. Fortunately, there are some ways to prevent phishing attacks:

  • Protect your personal financial information with strong passwords and daily monitoring, and be extra careful when giving out information, especially online -- if scammers don't know your info to begin with, the scam is harder to pull off; and
  • Only deal with people, companies, and sites you trust -- if there are changes to your closing, confirm them in person or over the phone with everyone involved in the home sale, and only do financial business on secure websites (those with "https" at the beginning.

For more information on home buying scams, or if you've been scammed during your home buying process, contact an experienced real estate attorney near you.

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