Watching out for These Common Scams Can Help Homeowners Protect Themselves

As the spring season draws near, homeowners are increasingly looking for new properties, sparking a surge in construction activity. Amidst this heightened market interest, scammers are also gearing up, anticipating significant cash transactions due to low mortgage interest rates. "Understanding common spring scams can help you avoid bad actors and hasty decisions, so you can protect your money," warned Darius Kingsley, head of Consumer Banking Practices at Chase.

In 2023, financial scams emerged as the most common ones impacting American adults, with 15% stating that at least one household member has been victimized, including 8% reporting personal experiences of being targeted. Three kinds of scams were found to be the most common in the residential property space, and keeping an eye out for those can protect prospective homeowners.

Securing Your Funds During Home Closing

The period leading up to home closing requires a significant portion of your savings and income. Kingsley warns of scammers who pose as mortgage lenders, banks, or government entities, requesting transfers to finalize the closing process. They swiftly transfer the received funds to another account, leaving victims unaware of their mistake until it's too late.

"Be cautious of fake wire transfer requests via email or text claiming your mortgage lender or realtor needs more money than initially asked for," he says. "If you are closing on a home, be very cautious and confirm payment instructions directly with your agent or loan officer through a known phone number to verify wire instructions before you send any money."

Exercise Caution with Home Warranty Solicitations

While investing in a home warranty can offer protection against unexpected repairs and expenses, it's essential to choose a reputable company with clear agreements and contracts. "Beware of fraudulent letters or emails claiming your home warranty is expiring or expired. To verify the legitimacy of a company representative, contact the number listed on their official website," Kingsley advises.

Moreover, scammers often exploit reputable company names by creating fake websites to lure people into investing. It's important for customers to opt for trusted sellers and to rely on verified reviews, recommendations, and direct communication with the company.

Don’t Fall for the Home Cleaning Service Trap

Today, an increasing number of small businesses are venturing into the market to vie with established home cleaning and lawn service giants. While not all of them are fraudulent, the prevalence of scammers creating bogus websites and impersonating legitimate businesses warrants caution.

"Exercise caution with ads on social media offering in-home cleaning or landscaping services. Often, these ads only provide a digital payment option like Zelle," Kingsey says. He sheds light on their modus operandi, saying, "They promise services but fail to show up when it's time to begin."

These scams, though diverse in their approaches, share a common thread: the exploitation of trust and vulnerability. In a society driven by convenience and digital connectivity, it is all too easy for individuals to fall victim to these cunning schemes.

Furthermore, FTC data, showing over $10 billion lost to fraud in 2023, underscores the prevalence of such schemes.