Scammers Target Idaho Homebuyers

Inside Subprime: May 29, 2019

By Lindsay Frankel

The Better Business Bureau is warning Idaho homebuyers about an ongoing scam in which fraudsters infiltrate a real estate transaction in order to steal thousands from prospective homeowners.

Typically, hackers gain access to the email accounts of the parties involved in the sale of the home. They’ll often gather details about the sale to make themselves appear legitimately involved. As the closing date approaches, the buyer will receive an email from the hacked account or similar email address that states the terms of the transaction have changed, including new instructions for sending funds. The scammer persuades the buyer to wire money to a fraudulent account not associated with the real estate transaction.

Similar scams have popped up across the globe in recent years. Between 2015 and 2017, the FBI found a 1,300 percent increase in losses due to business email compromise, which has now drained almost $3 billion from 22,000 people. In 2017, one San Antonio homebuyer lost over $36,000 to a spear phishing scam. In hindsight, she said she should have verified the transaction details by phone.

And that’s the same advice the BBB is issuing to prospective homebuyers. Consumers should contact the real estate agent or title company by phone to verbally confirm any transaction instructions before wiring money. The BBB also suggests that businesses enhance their cybersecurity measures and educate prospective homeowners about the dangers of spear phishing scams.

FBI spokesman David Fitz said the real estate industry is an appealing target for scammers, who are looking for opportunities to interfere with large transactions. The shift from phone correspondence and paper checks to email communication and wiring funds has caused a spike in this type of crime. Fitz also said that many companies may be unwilling to report the scam because of concern that their competency will be called into question, which means the scam could be more prevalent than FBI data indicates.

Idaho’s booming real estate market has led to quicker transactions and a sense of urgency that makes Idaho residents an ideal target for scammers. “Unfortunately, email and Internet scams are more and more prevalent and pose a growing threat to the real estate industry,” said Idaho Realtors CEO David Hensley. “If you receive a suspicious email or text during your home purchase or sale, the Idaho Realtors encourage you to reach out and call your realtor to make sure it is not fraudulent.”

If you or someone you know has been the victim of a spear phishing scam, you should report the fraud to the FBI’s Internet Crime Complaint Center.

Learn more about payday loans, scams, and cash advances by checking out our city and state financial guides, including Idaho, Boise, Idaho Falls, Rexburg and more.