New scam robbing home buyers of closing funds

The FTC and the National Association of Realtors are warning consumers and real estate professionals alike to beware of a phishing scam that’s draining home buyers’ bank accounts shortly before closing

New scam robbing home buyers of closing funds
The Federal Trade Commission and the National Association of Realtors have issued a warning originators might want to pass on to their buyers.

According to the FTC and the NAR, there’s a mortgage-closing phishing scam going around that could leave buyers without a down payment. The scam involved hackers breaking into the email accounts of real estate professionals and consumers to access information about home buyers’ closing dates.

Once the hacker has the closing date, he’ll send an email to the buyer posing as the real estate professional or title company, according to the NAR. The scammer will say there’s been a “last-minute change” to the wiring instruction for closing funds and instruct the buyer to send the funds to a different account. That account, of course, really belongs to the hacker.

According to the FTC, buyers who fall prey to this scam could find their bank account cleaned out in “a matter of minutes” – and it’s unlikely they’ll ever see that money again.

“If you’re buying a home and get an email with money-wiring instructions, STOP,” the FTC stated in a bulletin on the scam. “Email is not a secure way to send financial information, and your real estate professional or title company should know that.”

“Buyers should be wary of sending financial information over email, downloading attachments, or responding to email requests to wire money in a real estate transaction,” said NAR President Tom Salamone.

The FTC’s top tips to avoid phishing scams

Here’s what the FTC has to say about avoiding falling prey to scams like this one:
  • Don’t email financial information. It’s not secure.
  • If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the “s” stands for secure). And instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself.
  • Be cautious about opening attachments and downloading files from emails, regardless of who sends them. These files can contain malware that can weaken your computer’s security.
  • Keep your operating system, browser, and security software up to date.