Know When That Phone Call Is a Real Estate Scam
Bad actors are taking advantage of surging demand for remodeling projects and home warranties to dupe consumers. Share these warning signs with your clients.
Housing-related phone scams surged by more than 300% in May, according to telecommunications technology provider First Orion’s 2022 Mid-Year Phone Scam Report. Scammers increasingly are trying to dupe consumers on home-related items, including remodeling projects and home warranties.
Home warranty scams targeting seniors are skyrocketing, the report shows. Such schemes typically provide a callback number that captures the personal information of those who respond. First Orion estimates that U.S. mobile subscribers received more than 100 billion scam phone calls during the first six months of 2022. That resulted in financial losses of up to $40 billion.
Overall, the most common and emerging phone scams across industries involved vehicle warranties, health care, Social Security, life insurance, financial assistance and home warranties, the First Orion report finds. Kent Welch, First Orion’s chief data officer, recently spoke with REALTOR® Magazine about the growth in home-related scams and what consumers need to watch out for.
Q: What’s behind the big jump in the number of housing-related scams lately?
A: Scams are a big business, and we see scammers alter their tactics and their ploys to fit the season or the current events. We often notice seasonal trends; for example, tax scams soar during the first-quarter tax preparation season. Scammers also tend to take advantage of consumers’ needs, which can be tied to current events or pending legislation around themes such as student loan forgiveness.
It’s been a seller’s market lately in housing. During the pandemic, record numbers of consumers quit their jobs or retired early, opting to downsize or sell to take advantage of inflated pricing associated with the recent demand for homes. Likewise, consumers working from home have fueled an increase in demand for homes outside the typically strong job markets. Also, remodeling projects and home enhancements are in demand.
Interest rates are also going up, which can spark a rush on the housing market from buyers who are anxious to lock in rates or renters who want to move but can’t commit to a long-term loan.
What housing-related scams are you noticing increasing the most?
In June, housing-related scams were still growing, but by more like 90%, as opposed to the more than 300% growth in May. Here are some examples from more recent phone call scams:
- “Hi, this is Suzie. I’m a homeowners associate calling on a recorded line in regards to safety concerns within your home. How are you doing today? I’m with Consumer Council regarding home improvement. My callback number is…”
- “Hi, this is Laura. I’m a homeowners associate calling on a recorded line in regards to making improvements within your home. How are you doing today? I’m with remodeling loans. My callback number is…”
- “Hi, this is Stephanie. I’m a homeowners associate calling on a recorded line in regards to safety concerns within your home. How are you doing today? I’m with customer care regarding home improvement. My callback number is…”
Some of the buzzwords like “remodeling” and “safety concerns” are interesting. The scams are targeting more of the homeowner population as opposed to the mix of homeowners and renters, like in May.
The reference to “Consumer Council” is very common with other scams like Medicare, health care and vehicle warranty, suggesting the same scammers are alternating the theme, but the messaging is mostly the same or similar to other scams.
How can homeowners or renters avoid becoming a victim of these scams? Any more tips or red flags they should beware of?
First and foremost, don’t answer unknown numbers. If it’s important enough, they’ll leave a voicemail.
Perhaps one of the biggest mistakes people make on these calls is giving out personal information like their Social Security number or birth date over the phone. And definitely don’t give away banking information if you’re unsure if the person calling is in fact from your bank or, in this case, an homeowners association or a landlord. If they ask you to pay with a gift card or wire transfer, it’s definitely a scam. Hang up, look up the phone number to verify it and call them back.
Additionally, if you hear a robotic voice asking you if you’d like to be placed on the “do not call list,” don’t fall for it. Don’t press the button, don’t say yes—because that’ll put you on a list of active callers. Just hang up.
Lastly, consider getting a call tagging or call blocking service or consider registering with the federal Do Not Call registry.
Is there anything you’d like the real estate community to know about helping to educate their clients on this?
Branded communication is helping to restore trust between businesses and their customers over the phone. Businesses can brand calls with their logo, company name, department and reason for calling on the recipient’s mobile device at the time of the call and in the call log afterward, increasing the likelihood the customer calls back. With so many people now conditioned to ignore calls from unknown numbers, this reduces the number of unanswered calls and also helps identify the real calls from the fraudulent ones.
Source: REALTOR® Magazine