Many Faces of Fraud
January 16, 2017
Fraud. It takes on many forms and is a lucrative business. In 2015, $15 billion was stolen from 13 million people. Are you a victim of fraud? How would you know that you are being scammed? Are you prepared to see it before it hits you?
Fraud takes on many faces. Recently I met a “homeowner/investor” needing a new roof on a house that he just bought. Everything was done over the phone since the guy was out of town. He bought it from a landlord and the current renter was staying. Seems legit, right? So far so good.
It’s everything on the back end of this deal that smelled fishy. First thing to set up red flags was being contacted by the local police department. The renter called the owner of the property (landlord) to let them know that I was there. I applaud them for their due diligence. The owner had no idea I was there and why I was there and then called the police to report a trespassing charge. I left my card with the renter so they gave my card to the police. The police called me asking about why I was there. Come to find out we were in the middle of a scam.
Here’s how this scam works. The scammer searches the website for houses for sale. Then calls in a fake inspection and estimate. The contractor does what is required of them and then provides an estimate to the would-be homeowner. After some pricing negotiations, back and forth we come to the final price. In this case the homeowner would send me a check for the entire price of the roof replacement. Paying upfront is rare but not unheard-of; usually it’s half up front. I would deposit the funds into my account and then take out half and set in a “third party account” to guarantee funds when the project is completed. He sold it as an insurance policy to verify that I would complete the job and know that the funds were available when complete. This method of payment I have never heard of before. So, I started to consider further. A lot of phone calls later and many legal questions later, it was determined to be a scam. How I found out is through my bank’s fraud department. (Side note: if you ever think something is fishy, go to your bank and turn over everything to the fraud department. They are good at what they do!) I’ll give this guy credit, it all seems legit. They had details on the website that were impressive. They advertised as a publicly traded company, had their stock initials on the website, even tied to the ticker to show that were up in stock. But when you go to S&P website to look up their initials they didn’t exist.
Why is this scam important to you? If you are listing your home for sale, be on notice that scammers may use your home information to scam someone else. Work with your real estate agent and keep close tabs on people that are coming and going from your property. Also, any contractor that knocks on your door (this is same for any work that you do) make sure they give you a business card with all contact information on it. If it feels weird, call your real estate agent. Keep an open conversation and ask a ton of questions until you feel comfortable. You should only conduct business with licensed contractors.
I don’t make it a habit of using this forum to refer business, but in this case it’s important. If you don’t have identity fraud protection or legal protection I would highly suggest that you at least consider it. In our current world, fraud takes on many faces and it may be too late for you to see it. LegalShield has great services and is affordable. Otherwise, talk with your insurance agent.
I have turned this case over to local authorities and I may never know the outcome. Luckily for me, I smelled a bad deal from the beginning and didn’t lose any money. But, for another person it may be a different story. Be smart. Be vigilant. Be safe.