Old Scams, New Tricks Target Real Estate

AMA4-4-13The Nigerian Internet scheme is so well known, it’s become a joke. Yet it keeps on rolling, blackening the name of an entire country and taking on new forms to snare still more unwary victims. Now, fraud experts report, the Nigerian scams are targeting the world of real estate, with a new variation on the scheme that’s aimed at home buyers and sellers on large marketplace sites like Craigslist and eBay.

The basic scam in its Internet form comes from many places, although the most common is Nigeria. In it, official looking emails are sent asking for help to get a large sum of money out of the country. Victims are asked to put up some money to create a bank account and defray costs of the transactions. A check is promised, and often sent, which is fraudulent. But by the time that’s established, the victim’s money has already vanished.

The real estate version puts a new spin on the scam. A seller who posts a property to a marketplace site is typically contacted by an individual claiming to be from a country filled with unrest. This person says he’s desperate to buy the property to get his family out of danger. He needs the seller to create a special bank account to handle it and put in enough funds to cover costs – between $1,00) and $5,000. He assures the seller that he’ll send a check to cover it all. If the victim hasn’t picked up the red flags by now, he’ll accept this check, deposit it and send the requested funds – only to find out the check is a fraud.

Fraud specialists point out that in most cases, these scams don’t work. But as struggling homeowners become desperate to sell their properties, they’re often all too willing to overlook the signs of a questionable deal – and the perpetrators go to great lengths to appear legitimate. The scammer may work hard to build trust by sending family photographs and sharing personal information with the victim for weeks or months before springing the trap.

Scammers generally snare their victims using “soft” techniques like that. But as the scam proceeds, they step up the pressure if the mark doesn’t respond quickly. Demands to send funds right away, warnings of the dire consequences if a victim doesn’t pony up, and even outright threats can follow as the scam proceeds. By that time, scammers may have collected a fair amount of information from the would-be victim, creating openings for identity theft and in-person visits.

Though sites like eBay and Craigslist offer ways for legitimate sellers and buyers to connect, it’s important to stop the communication the minute you suspect a scam – and if it seems fishy, it probably is. More than that, Internet crime experts urge victims to report the scam to the FBI as an Internet crime. And, it”s essential to notify the host site of the posting so it can be removed.

Jason Hartman urges investors to educate themselves and proceed with caution into the world of income property investing, and that’s good advice for avoiding this and the many other scams targeting the housing market. (Top image: Flickr/PaperCat)

The American Monetary Association Team

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