By Elliott Greenblott, Just when you thought you’ve seen everything …
Here is a scam that can really leave you out in the cold — home title fraud. The crime begins with a data breach followed by identity theft.
With your identity compromised, all of your finances including mortgage information is revealed. Armed with your identity, the scammer impersonates you and moves in one of three ways: refinances your house, transfers your title and takes out loans, or sells your house.
In the refinance scenario, the criminal discharges and refinances your mortgage for a higher amount. The additional money is deposited in a new bank account and the scammer leaves the scene with the cash. Since the new mortgage is in your name, the lender now goes after you once the mortgage payments stop.
In the second situation, title transfer, the “new” title holder obtains a new home equity loan or mortgage, takes an advance in cash, and runs. The result is a foreclosure notice for nonpayment.
In the third scenario, your property is actually sold in an internet transaction to innocent buyers.
In each case, you are “on the hook” since the sale or refinancing appear to be legal. The responsibility for repayment belongs to you until you prove that you were the victim of fraud.
In the case of the home sale, you could be temporarily forced out of your home or lose your home to the buyers. You were the victim of identity theft and title fraud, not the buyers and failure to resolve this quickly can damage your personal credit score.
Ironically, those most susceptible to this type of fraud have clear title to their property — no mortgage, home equity loan or lien. That is because liens add complications to any property transfers or new liens.
Demographically, seniors are most vulnerable since they more likely have clear title, but this threat is real for everyone with property.
Protecting yourself from this type of fraud bears a good deal of similarity to the general protective steps. Of greatest value is being guarded in disclosure of personally identifiable information — Social Security number, Medicare account, driver’s license number, account information.
Be most wary using social media and when requests come from strangers on the phone or internet where criminals use impersonation to gain compliance on requests for this data.
One of the best ways to protect against many types of fraud is to order credit freezes on your data held by credit bureaus. A freeze prevents the distribution of financial and personal information by the credit bureau which in effect eliminates the processing of most new financial transactions: Equifax, 800-525-6285 or www.equifax.com: Experian 888-397-3742 or www.experian.com; Innovis, 800-540-2505 or www.innovis.com; and TransUnion, 800-680-7289 or www.transunion.com.
There may be a small fee for the service. Credit freezes do not interfere with existing financial activities such as credit cards and mortgages and can be removed or temporarily lifted for needed access to your information.
Another way to protect against title fraud is often through title insurance. If you have purchased property, you likely have had to purchase title insurance. Be sure that the policy covers the full value of the property as quite often what is required by lenders only covers the amount they are loaning to you.
Also monitor bank and credit statements including mortgage and loan balances. Anticipate the arrival of regular payment notices such as mortgages or loans and notify the lender if notice is not received.
If you find yourself a victim of this type of fraud, follow the following six steps toward recovery;
1. Collect relevant information such as any names, dates, contact information, account numbers;
2. Report the situation to property lien holder, banks, credit card companies;
3. Notify the credit bureaus and institute freezes on your information;
4. Contact the Federal Trade Commission and file a report: 877-438-4338 or www.identitytheft.gov;
5. Report the suspected breach to local law enforcement filing a police report and obtaining a copy of the report;
6. Develop a recovery plan (see www.ftc.gov).
Have questions and need assistance? Call the AARP National Fraud Watch Network helpline at 877-908-3360.
Elliott Greenblott is a coordinator for the AARP Fraud Watch Network and writes this biweekly column. If you suspect that you may be a victim of a computer-based scam, call the AARP Fraud Watch Network hotline at 877-908-3360 or the Massachusetts Attorney General’s Consumer Protection Division at 617-727-8400.
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