Closing on a Home? Protect Yourself (and Your Money) From This Scary Scam
You spent years saving.
You looked at more homes than you can count.
You finally found the perfect place in your dream neighborhood and have probably already started decorating it in your mind while you wait on closing.
But before you get too excited, listen up: The Consumer Financial Protection Bureau is warning about a new scam that could cost you thousands of dollars and pull your new home out from under you.
Here’s How the Scam Works
According to the CFPB, the scam is surprisingly simple. The victims tend to be people who are only days away from closing on a new home.
Although you likely have already worked out the details of the closing process with your real estate agent and closing agent, the scammer pretends to be someone involved in the closing process, like the settlement agent, title company or attorney, and sends you an email saying the process has changed.
The scammers send you the email in an attempt to get you to send your down payment and closing costs to them. And of course, once you do, your money is gone.
“The email falsely claims there has been a last minute change in the closing process, for example, that a check is no longer acceptable or that the wiring instructions have changed,” the CFPB said. “It instructs the homebuyer to wire or otherwise electronically transmit the closing funds to an account that the scammers control.”
How to Protect Yourself
The CFPB provides several tips on how keep yourself safe from scammers when you’re buying a home.
- Speak directly to your real estate or settlement agent to understand the closing process. Make sure you fully understand the details. If you get an email about the process changing, call your agent to make sure it’s legit.
- If you get a suspicious email, don’t call any phone numbers or click any links in the email in question. Instead, call the phone number you already use to contact your agent. Ask your agent to verify any changes.
- Never email any financial information, and don’t open any attachments.
- If you think the email is legitimate, take the extra step of reaching out to your bank. Bank employees can spot red flags that could be signs of a scam, including slight differences in an account holder’s name or an account number that other consumers have filed complaints against.
- Finally, once you wire money, make sure the intended recipient received it. If the person has not received the money, contact your bank immediately. You only have a small window to reverse a wire transfer.
Already a Victim of This Scam? Here’s What You Do Next
If you’re reading this a bit too late and know your money is with a scammer, there are a few steps you can take.
Start by reaching out to your bank or the company you used to make the wire transfer. If you’re lucky, you may still be able to reverse the transfer. That’s your best chance of getting your hard-earned money back quickly.
Both agencies will investigate the crime and try to get your money back. Your information might also help protect other people in the future.
Desiree Stennett (@desi_stennett) is a staff writer at The Penny Hoarder.