New York Real Estate Lawyer Blog
In today’s world of e-commerce, various forms of internet and email scams have arisen because large sums of money swap hands on digital platforms, through insecure communications. In real estate, and everyday communication, be wary that criminals often divert large sums of money by spoofing, phishing, or otherwise diverting your personal information for their own personal gain.
For example, in Minnesota the Boys and Girls Club of the Twin Cities, fraudsters posed as the charitable organization to get donations, frequently using kids on street corners to gain the sympathy of passersby. In England, according to this article, there have been several instances of fraud.
To avoid these tragedies, there are ways for you to protect yourself when conducting real estate business online. One key step is to verify that the website is properly secured. One way to know that is if the website starts with HTTPS (“s” means secure). Personally ask the lawyer or the law firm assistant or other contact what kind of security features are observed both with the computer and with the maintenance of private information. Be careful if the internet web-site you are using is not secured. Be wary about what information you send by email communication, being sure there is a secure, encrypted connection before sending any sensitive materials or information like bank account numbers or social security numbers.
According to the United States Government site, all types of fraud occur related to real estate: moving fraud, foreclosure scams, predatory loans, and rental scams for both vacation properties and housing. Consider these tips for avoiding internet fraud:
- To avoid moving fraud, check the mover’s background, verify the mover’s insurance and licensing, and research and receive several estimates from different companies to ensure the price they quote you is fair.
- If the bank is foreclosing on your house, be careful of the various and nefarious individuals “offering to negotiate with your lender, advising that they can stop foreclosure by ‘helping’ you file for bankruptcy, asking you to sign over the title to your house…promising to act as an intermediary between you and your mortgage lender to refinance your loan, and instructs you to make payments directly to them instead of a lender.” These are likely scams, which you may complain about to the Federal Trade Commission to report the fraud.
- Shop around if the only lender seems to be way to expensive; offers exorbitant interest rates or charges outrageous fees to “compensate for your low credit score;” shop around for lenders and verify references as well as research the prices of homes in your area to make sure you are not overpaying for your home.
- To avoid rental scams you should independently verify the property’s price (is it too too low?); never sign a lease before viewing the property; don’t pay fees to see the property; refuse demands for cash or wired money for deposits; read the proposed lease before signing and paying because it might not represent your agreed terms; be wary of “used-car-salesman” tactics to get you to sign a lease.
- For vacation rentals, call and speak to someone, avoid paying by check or cash– pay by credit card so you can claim fraud if you are ripped off, ensure there are refund policies to protect your money.
As a consumer in our everyday world, you need to be vigilant. Most importantly, your real estate professionals, including all banks, attorneys, brokers and owners need to be careful about conducting any transactions by email because the information learned from our daily communications can be monitored and diverted through the intermediary’s website, such as a firm or financial entity.
At Klose & Associates, we take your security very seriously (because your security is our security) and can offer you a legal advice to avoid all these various scams and ensure that your internet and property transactions go smoothly and securely.