The real estate industry performs some of the most complex transactions globally, which means that they caught the attention of many scammers and thieves who want to obtain personal gains through the usage of fraud by making both sellers and buyers vulnerable to a variety of fraud schemes.
Nowadays, due to the implementation of technology in our daily lives, it's common to see your email inbox overflowed with multiple not-friendly requests and emails that were "sent" by scammers and identity thieves.
The way in which many scams in the real estate industry happens is due to the multiple receptions of fraudulent emails in the victims' inbox with requests about updating bank accounts information. In case you didn't know it, this information is often more than enough to gain access to your funds and transactions, hijacking them and losing everything due to falling for a scam.
Types of Frauds and How to Protect Yourself:
Being the victim of traditional fraud might be troublesome but at least most of those cases can be solved in no time. However, when it comes to real estate transactions, the case becomes more problematic as many things must be considered due to the nature of the transactions.
That's why it's recommended to have some understanding of how these frauds work and what can be done to protect yourself against them. In this article, all the types of real estate fraud will be discussed to understand how it can be possible to protect yourself against them.
One of the biggest issues with the digitalization era is the fact that many individuals tend to have the bad habit of using the same password for absolutely every platform. In the case of certain real estate agents, the situation isn't any different. Wire fraud begins when a hacker obtains access to the password of a real estate agent and then proceeds to enter communication tools like e-mail. After that, what proceeds will be them looking for phrases like "offer is accepted" or "negotiations completed."
The reason why those phrases are looked at is due to the fact that they are used only when the deal is accepted. This means that what comes next is the transaction of the funds. This is when wire fraud occurs. The hacker sends an email to the buyer with wiring instructions to pass the funds of the purchase to an external bank account. By the time the buyer realizes they haven't received replies back regarding the financial transaction, the hacker has already completed the wire fraud scheme
How can you be Protected Against Wire Fraud?
The simpler yet most effective way of preventing wire fraud is by manually calling the real estate agent for absolutely every email sent to your inbox related to the transaction. This way, both parties can be rest assured knowing that all of the funds will be transferred to where they should go.
Another important measure that is done in combination with the previous one is to avoid using the number that can be found on the email sent by the hacker. You might think that the agent owns the number, but once an email is compromised it's extremely easy to change all of that information. Instead, use business cards or the numbers that are listed on their website.
Due to the fact that we are living in the era of digitalization, cyberattacks are becoming more common as time passes. Being the victim of identity theft is never a good thing, as cyber thieves can take out loans and even buy expensive properties in your name after your personal information has been compromised.
Being the victim of identity theft is dangerous, as you might never know that you are a victim until it's too late. The way it happens is simple to explain. First, the victim receives an email from a hacker targeting your information and data. The received email might be a phishing email (an exact copy of emails sent by popular companies). A change of data or personal information update is required to keep using the services of a certain company.
Sadly, many individuals fall for the phishing email, and their information gets compromised, allowing hackers to have open access to credit cards and obtain personal gains through your effort and hard work.
How can you be Protected Against Identity Theft?
To avoid identity theft, it's recommended to acquire identity theft protection services. These protection services will manage to keep your information protected against cyber thieves by having resolution specialists available for your case 24/7.
Every piece of personal information will be under strict watch. In this way, social security number, credit reports, driver's licenses, insurance, and bank accounts can be free of theft thanks to identity theft protection services.
This fraud scheme occurs when an involuntary transfer of the property's ownership is bypassed without the true owner knowing about it. Scammers will try to transfer the ownership to someone else, and they can borrow a lot of money by using someone's property as collateral. Fraudulent liens on a property can be avoided if the lender and title company are doing a good job.
How can Title Fraud be Avoided?
To avoid title fraud, it would be ideal to have a trustworthy lender and do business with only legit title companies. Also, something that is often underrated is getting an owner's title insurance which will protect your property ownership even when you become a victim of fraud.
Scammers can easily access and steal your information about a certain property listing and then proceed to add contact information for themselves. In this way, they will ask for money upfront for a property that they don't even own. This fraud scheme affects buyers and tenants as they will be the ones who will lose the funds due to making transactions to pay the "rent" that was requested by the "property owner," which ends up being a scammer.
How can Rental Scams be Avoided?
First of all, rent transactions should only be made after confirming with the property's owner beforehand, don't try to make big payments without checking the veracity of the operation. Renters should avoid at all costs signing paperwork without seeing the rental.
Rental scams are the cause of the loss of millions of dollars over the last few years. It's extremely important to be rational and operate with patience and security.
Predatory lending happens when someone imposes unfair and abusive loan terms on borrowers. Luckily, this is a practice that has been declining over the years, but it can still happen nowadays.
Being the victim of predatory lending could involve high-interest rates, higher fees than usual, and terms that don't promote equity by using aggressive sales tactics to get borrowers to take out loans that can't be afforded.
How can you be Protected Against Predatory Lending?
The best way in which you can protect yourself against predatory lending is by being educated on the matter. Read the contracts, pay close attention to interest rates and the consequences that might happen if you are late on a payment, and look for misleading marketing techniques as they will be used against you.
The best offense is based on having a good defense, being someone with a good credit history, and then you can be eligible for low-interest loans, meaning that no one would ever try to play dirty tricks with a clean credit like yours.
It's sad to see that certain individuals can use something as efficient as technology to wreak havoc on your finances. The future isn't looking any brighter as real estate fraud cases are just increasing over the years even when preventative actions are being taken. Everything depends on your own protection. Following the previous security measures will pay off and prevent you from real estate fraud