Down payment scams are common

As if finding a new home wasn’t stressful enough, buyers now also have to be on the lookout for scammers. We recently wrote about thieves stealing title deeds online. Tap or click here for spooky details and ways to protect your home.

But there’s a new twist on home buying scams. You won’t believe how sneaky these schemes are. If you fall in love with them, it could cost you the down payment on your new home.

Read on to find out how this scam works and what you can do about it.

Here is the backstory

Anyone who has bought a home recently can attest to the mountain of paperwork that goes into it. The process can take several months to run its course.

A down payment is an official way to claim a new home. This is usually a prepaid lump sum that is deducted from the final sale price. Of course, the house is as good as yours once you put down a deposit and the seller accepts it. Unfortunately, that’s where thieves come in.

The FBI warns that scammers are targeting homebuyers through phishing attacks. But some go even further and infiltrate corporate email systems. Known as business email compromises (BECs), scammers can email anyone they want while pretending to be a legitimate business.

Here’s how the scheme works. The criminal will send potential buyers an email with details about the down payment. Are your spider senses tingling? Yeah. You guessed it. The message asks you to send the payment to a specific bank account. But the account belongs to the scammer, not the seller or the real estate agent.

If you transfer money to cybercriminals, the chances of getting your money back are slim. This is why you need to be very careful before sending money to anyone. There are other ways to avoid falling victim to these types of scams.

How to avoid down payment scams

The FBI has a small team to fight the BEC, but it’s a constant battle against time. An agent speaking to Bloomberg on condition of anonymity explains that the FBI has about 36 hours to find the money or it is all but gone.

There are ways to minimize your chances of falling victim to a down payment scam. Here are FBI suggestions for staying safe:

  • Do not transfer funds to people you do not know.
  • Don’t invest in a house or apartment that you haven’t seen.
  • Confirm the identity of the seller by searching public records to determine who owns the property you want to rent or buy.
  • Do not complete online applications until you have met directly with the seller or real estate agent.
  • Beware if a potential seller says they are overseas and want the deposit paid into a foreign account.
  • If you receive an email or text regarding a deposit, first phone the real estate agent to confirm that they sent the message. Also check bank details and make sure all data is correct.
  • Do not click on links or download attachments you receive in unsolicited emails or text messages. They could be malicious and used to scam you or infect your wifi device.and malware.

What to do after wire money to a scammer

If you think you wired money to a thief, take these steps as soon as possible:

  • Contact your financial institution immediately upon discovering the fraudulent transfer.
  • Ask your financial institution to contact the corresponding financial institution where the fraudulent transfer was made.
  • Contact your local Federal Bureau of Investigation (FBI) office if the wire is recent. The FBI, in conjunction with the United States Treasury Department’s Financial Crimes Network, may be able to help return or freeze the funds.
  • File a complaint, regardless of monetary loss, with www.ic3.gov or, for BEC/EAC victims, bec.ic3.gov.

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About Matthew R. Dailey

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