Leticia Shifflet, executive officer, Cache Valley Association of REALTORS®
Bring up the subject of a mysterious Nigerian Prince asking for your help to transfer his large fortune, and chances are high you’ll find yourself in good company. But what’s different from the phishing Nigerian Prince email scam from the last few decades to now? Artificial Intelligence and cybercriminals with access to an advanced set of tools. These types of attacks have become more sophisticated, common, and dangerous. A study by security provider SlashNext analyzed billions of attachments, link-based URLs, and natural language messages in email, mobile, and browser channels and found more than 255 million attacks, a 61% increase compared to the previous year. They also noted that cybercriminals are shifting their attacks to mobile and personal communication channels to reach more users.
Scams are increasing and harder to identify, and many homeowners are unpleasantly surprised to find that scams are also becoming more common in real estate. The most common real estate scams include wire fraud for first-time buyers, contractor scams for homeowners, and moving scams.
Many young home buyers don’t have prior experience in the real estate market and are more susceptible to missing the major red flags related to wire fraud. When they are not familiar with the nuances of the closing process, they don’t know what to look out for, even if they are not digitally naïve. In these situations, home buyers can be tricked into wiring a down payment or closing costs to an escrow account controlled by cybercriminals who have used phishing techniques like the Nigerian Prince email scams. When these hackers can trick buyers into inputting their private information (which could be something as simple as clicking a link through an email or text), they can steal login and password information to gain access to accounts and produce fraudulent wire transfer instructions that appear to come from a trusted real estate professional. New and experienced buyers can protect themselves with the help of REALTORS®, who support buyers in avoiding the pitfalls and scams frequently associated with real estate fraud.
Regarding contractor scams, it’s important to note that about one in 10 Americans have fallen victim to this scam, losing an average of $2,426. Some of the most common contractor scams include quick, low-quality work without a contract, low-cost estimates that turn into increased costs during a project, required down payments or billing for subpar work, and more. To avoid these situations, homeowners can utilize trusted contractors who do repeat work for REALTORS®. A REALTOR® keeps a list of proven businesses and utilizes professionals who provide proof of permits, licensing, and insurance and are happy to produce contracts for their work.
Moving scams have been on the rise and are projected to jump 35% by the end of the year. On average, moving scam victims have lost $836 this year alone, costing a collective $1.59 million. Some of the most popular moving scams to watch for include the following:
- •No-show incidents where a moving company doesn’t show up after requiring a deposit or upfront fee.
- Address changes, where scammers direct victims to a website that looks like an official USPS and requires $100+ to change an address to the new residence.
- Mover fraud when scammers pose as real companies and hold the consumer’s possessions hostage until a ransom has been paid. This is often referred to as “hostage fraud.”
As you prepare for a move, whether now or in the future, compare quotes from multiple companies and keep a detailed inventory
of your possessions. It’s also a safe recommendation to purchase moving insurance if you have high-value items that will be transported. The best protection is awareness and utilizing trusted professionals — somebody you know — to recommend providers and verify any correspondence during your real estate experience.