Whether through email, text, malicious websites, or phone, scammers are constantly trying to separate you from your money.  Tactics range from a simple fake website to elaborate schemes in which people assume a false identity and convince you to wire them thousands of dollars; they may even come back for Round 2 and scam you a second time by pretending to help you recover your lost funds.  Big red flags are pressure to act quickly and requests for money in the form of a wire transfer, gift card, cryptocurrency, or other untraceable payment. You should also pause if any person or company—even one you know and trust—is asking you for personally identifiable information (your bank or employer will never email you to ask you to verify your username, password, or PIN).

In real estate, we are constantly striving to protect our clients from fraudsters.  We consulted both our experience and the FBI’s fraud department to bring you this list of common scams and how to avoid them…

1. Rental Scams

HOW THEY WORK:
Scammers offer a bogus rental opportunity and pressure potential renters into sending personal information and/or money for fees, deposits, or rent.

HOW TO PROTECT YOURSELF:

• Beware of “too good to be true” rental offerings, particularly those with a sense of urgency and anyone not willing or able to meet in person.

• Confirm that the property is actually for rent by cross-checking on multiple websites and confirming the contact info matches—don’t trust links sent to you by email or text.

• Don’t give away personal information before the touring the property or in response to unexpected requests.

• Tour the property in person, or have your agent or a trusted friend/family member tour it for you if you’re out of area. Note: some scammers will actually meet you at the property and may even have a code to get into the lock-box, which leads us to…

• Vet the person offering the rental. If they’re emailing you, check the domain name after the @ carefully (if it’s something generic like @gmail, be extra cautious since those can be created by anyone). If it’s a service, check their reviews on the Better Business Bureau and other review sites. You can also ask for a business card; if they’re an agent, ask for their license number and check it against the state database (here is Washington’s). If you’re working with someone claiming to be the owner, check county records to ensure their name matches the owner on record.

• Never pay any fees, deposits or rent via wire transfer, cryptocurrency, gift cards, or a sketchy website you don’t recognize. Use traceable methods like an ACH transfer through your bank, or a debit/credit card…after you’ve vetted the person and the listing.

2. Business & Investment Fraud

HOW IT WORKS:

• Advance fee schemes convince victims to invest money up front for a future, larger return that never comes.

• “Nigerian Prince” letter schemes promise you a cut of some huge sum of money in exchange for helping someone illegally transfer it out of their home country.

• Ponzi schemes collect money for a bogus investment, and then use incoming money from new investors to pay previous investors until the whole thing collapses.

• Pyramid schemes operate like a hierarchy where you send money to people above you and are promised huge returns by bringing in new investors below you. People at the bottom lose…and the whole setup is illegal.

• Telemarketing fraud schemes coerce money from you over the phone by claiming you won a prize, convincing you you’re in legal trouble, and any number of other imaginative claims.

• Cryptocurrency investment fraud involves scammers manipulating victims into depositing fake “investments” via cryptocurrency; in the end, they lose all of the money they invested to the criminals.

HOW TO PROTECT YOURSELF:

• If it sounds too good to be true, it probably is. There is no such thing as a guaranteed return, and you should be wary of anyone promising you’ll get rich quick.

• Never rush into an investment opportunity. Pressure to invest now and “get in the ground floor” is a red flag that you’re probably being scammed, especially if they ask you not to tell anyone about it.

• Never invest on the advice of someone you meet solely online. This includes strangers and people claiming to be long-lost contacts on social media.

• If you believe you’ve been victimized, don’t pay additional fees/taxes to access your money. This is part of the scam, as well as any service that claims it can help you recover your lost funds.

3. Home Purchase Wire Fraud

HOW IT WORKS:
You receive a message that looks like it’s from a trusted sender, giving you instructions on wiring money for making a payment during the home buying process. The money goes straight into the fraudsters’ account.

HOW TO PROTECT YOURSELF:

• Pre-plan the closing process, discussing payment options with your lender. Call them directly and ask specifically about instructions for wiring funds (don’t ask for this over email since scammers usually operate by compromising the email address of one the parties).

• Record contact information for trusted people involved in your purchase process, including your agent, lender, title company, and attorney. If someone new reaches out, confirm their identity by speaking directly with one of your trusted contacts.

• Call a known number to confirm wiring instructions before sending any transaction through. Talk to one of your trusted contacts and ask them to repeat the wiring information to confirm it’s legit. Call again after the transfer to ensure that funds were received.

• Watch for red flags like someone saying that you previously sent funds incorrectly, that they were never received, that there are new instructions for payment, or that there has been a last-minute change to the closing process. Call a trusted contact immediately.

• Read our full article on wire fraud.

4. Timeshare Fraud

HOW IT WORKS:
Fraudsters claim to help timeshare owners exit, rent, or invest their timeshares with upfront taxes or fees required (which the scammer pockets). Once the victim realizes they have been scammed, the fraudsters may re-approach them posing as lawyers, police, or government officials claiming they can help recover the lost money—again, requesting upfront fees. Some may even threaten the victim with prison time if they don’t pay up.

HOW TO PROTECT YOURSELF:

• Stop communicating with anyone who requests cash upfront for something related to your timeshare.  This is true no matter which institution they appear to be with or what contracts, letters or bank account documentation they may provide (criminals do their homework and sometimes create fraudulent documents).

• Don’t send legal documents via email. Never sign, notarize, or send any power-of-attorney or other document.

• If you’ve been scammed, stop sending money, file a report with the FBI’s Internet Crime Complaint Center (IC3) and only work with them. Do not communicate with anyone who claims to be a government official reaching out about a settlement, threatening to arrest or prosecute you if money isn’t paid, or threatening to subpoena you.

5. Fraudulent Charity Scams

HOW THEY WORK:
Criminals exploit tragedies, natural disasters, or political events to seek donations for fake charities.

HOW TO PROTECT YOURSELF:

• Give to trusted charities/groups by manually typing out the web address. Don’t click on links or open attachments to donate. Look out for organizations with copycat names trying to impersonate reputable organizations.

• Vet charities before you give by using a site like the BBB Wise Giving Alliance, Charity Watch, or Charity Navigator. You can also search the charity’s name plus “complaint,” or “scam.”

• Give using a check or credit card. Avoid any request to donate via cash, gift card, virtual currency, or wire transfer—it’s probably a scam.

6. Elder Fraud Schemes

HOW IT WORKS:

• Romance scams involve scammers who use the illusion of a relationship to manipulate and steal from the victim.

• Tech support scams allow criminals to gain access to victims’ devices and sensitive info by posing as support reps and offering to fix non-existent computer issues.

• Grandparent scams involve criminals impersonating relatives in urgent financial need to extort money from victims.

• Home repair scammers charge homeowners in advance for home improvement services that never happen.

• Sweepstakes/lottery scams convince the victim they have won a large prize that they can collect for an upfront “fee.”

• Government impersonation scams extort money from targets by frightening them into believing they must provide funds or payments to avoid arrest or prosecution.

HOW TO PROTECT YOURSELF & YOUR FAMILY MEMBERS:

• Never send money, gift cards, or valuables to anyone you have only communicated with online or by phone. In addition, never send sensitive financial information or inappropriate photos that could later be used to extort money from you.

• Create a shared verbal password that only you and your loved ones know.

• Be wary of unsolicited calls, mailings, and door-to-door service offers. Vet any contractors before you hire them (especially anyone requesting payment before work is performed). Be aware that legitimate tech support services will never reach out to say something is wrong with your computer.

• Resist the pressure to act quickly. Scammers use urgency and fear to coerce victims into immediate action.

7. Spoofing & Phishing

HOW IT WORKS:

• Spoofing is when someone impersonates a trusted person or company by disguising their email address, name, number, or website.

• Phishing schemes typically use spoofing to get you to think you’re on a legitimate site, then obtain your password, credit card number, banking PIN, or other sensitive info by making you think you need to update or verify your personal information.

• Variations include Vishing (same thing but over phone or VM), Smishing (phishing via SMS text message) and Pharming (your computer is infiltrated with malicious code that redirects you to fake websites).

HOW TO PROTECT YOURSELF:

• Don’t trust any company reaching out to you for your username and password—they don’t do that. Even if it’s a company you know and use, avoid clicking on any links and instead call the company directly using their official phone number to confirm if the request actually came from them.

• Pay careful attention to spelling in email addresses and websites. Spoofers often use email addresses or web addresses that may be just one letter off from the genuine ones.

• Set up two-factor authentication for all of your password-protected accounts. This adds an extra layer of security that can protect you even if a phisher obtains your username and password.

You can find information on more scams and how to avoid them on the FBI’s website.  When in doubt if something is legit, stop communications and call the company directly or consult a trusted advisor like your attorney, family members, or real estate agent.  If you feel you’ve been the victim of the scam, contact police directly and/or report it to ic3.gov, the FBI’s Internet Crime Complaint Center (IC3).  Do not engage with anyone who reaches out to you claiming they can help you recover your lost funds.

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

Sources:
https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams
https://consumer.ftc.gov/features/donating-safely-and-avoiding-scams#research
https://www.windermere.com/blog/what-is-wire-fraud-and-how-to-avoid-it