Chicago home buyers, especially first-time home buyers, need to stay vigilant when it comes to avoiding closing scams. These scams use hijacked email accounts to send false closing instructions to home buyers, who then lose their down payment and closing funds.
The Chicago Tribune published an article about the issue a few months ago, but the problem hasn’t gone away. Recent cases of fraud have affected closing transactions in the Midwest. Here’s what Chicago home buyers need to know!
How the home closing scam works:
Hackers break into an email account belonging to a real estate agent, title company, or other party. The hackers monitor the email traffic, sometimes for weeks or months, to identify all of the people involved in a home sale.
Once inside the loop, hackers can find out the closing date, down payment amount and settlement costs. They are especially interested in closings that involve large amounts of cash. Once the hackers choose their victim, they wait for the perfect time to strike.
Right before the scheduled closing, the hackers send fake, last-minute instructions through the hijacked email, telling buyers that they must wire all funds to a specific account. The money then disappears into an offshore account that belongs to the hackers.
Don’t assume you’d never fall for it; these scam messages look legitimate. The hackers are careful to use the same logo, email signature and writing style of an actual person in the transaction; someone you are likely to trust. And once the money is gone, there is no recovering it.
How Chicago home buyers can avoid closing scams:
Never include your personal financial information in an email. Do not list the name of your bank, your account number, ect.
If you receive an email with money-wiring instructions, STOP! Ideally, your agent, lender or title company should never give money transfer instructions through email to begin with. There is no such thing as truly “secure” or private email.
Never take any financial instructions you receive through email for granted. Call the sender to verify the information.
If you receive an email attachment you were not expecting, even if you know the sender, be careful about opening it. Attachments can contain viruses and malware.
Beware of following “click-though” links in an email, especially when they lead to a page requesting financial information.
If you’re using an online form, or any website that requires financial information, verify that the site is secure. Make sure the URL begins with the prefix of https. (The “s” stands for secure).
If you receive a “phishing” email, report it to the Federal Trade Commission. If you or someone you know have been victimized by an online or email scheme, report it the FBI Internet Crime Complaint Center.
StartingPoint Realty – educating first-time Chicago home buyers!
StartingPoint Realty specializes in educating and serving first-time home buyers throughout Chicago and the Northwest suburbs. We provide complete guidance during the entire home buying process!
Be sure to attend a free home buying seminar to learn about Chicago home buying! There’s no sales pitch, and no obligation. Always feel welcome to contact us for help with your Chicago home buying questions!
Ryan Gable Broker/CEO Starting Point Realty
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