Protection your Biggest Transactions

In this week’s email we are going to cover a topic that is always front of mind for us here at PrairieFire and should be front of mind for our clients as well – fraud.

Financial fraud continues to get more and more advanced every year, which makes it crucial to stay up to date on the latest scams and regularly verify that your financial assets are protected. You usually hear about fraudsters targeting seniors, but they are also beginning to target individuals who are in their peak earning years – when frequent large financial transactions happen such as, buying homes, conducting renovations, moving across the country for a new job opportunity, etc.

Real Estate Wire Fraud:

This type of scam remains on the most financially damaging in the United States. According to industry reports it is estimated that $500 million is lost annually due to real estate wire fraud. First-time homebuyers are three times more likely to be victims compared to their experienced counterparts.

Fraudsters frequently infiltrate business email communications between buyers, sellers, real estate agents, and title companies. They sit behind the scenes, learning the transaction details, convince everyone they are a legitimate party in the exchange and plan their move. They usually strike 24-48 hours before closing via email, claiming wiring instructions have been changed due to a “bank update” or “processing requirement”. These fake emails are convincing as they use correct names, reference specific property details and maintain the communication style of previous messages.

Contractor and Home Repair Scams:

The Federal Trade Commission reported 81,925 home improvement fraud complaints in 2024, and victims reported a median loss of $1,800 per incident.

One of the more common schemes involves “storm chasers” or unlicensed contractors who arrive after natural disasters. They offer immediate repairs, collect large deposits and disappear. This scam tends to be successful because there is a lack of knowledge around contractor licensing requirements and the victim feels pressured to act immediately.

Moving Company Fraud:

The Better Business Bureau received 718 complaints against moving companies in 2024, and the median loss among reported victims was $754.

Fraudsters using this method keep the victim’s belongings held hostage. To do this, they offer a substantially lower rate up-front – once the belongings are loaded onto the truck they will demand significantly more money (double or triple the original quote) and will refuse delivery until the extra funds are paid.

How to Protect Yourself:

VERIFY! VERIFY! VERIFY! This is the best way to defeat most of these fraudsters. Conduct your own verification by calling a business’s phone number that you found yourself – not one provided to you.

Fraud Prevention Checklist:

  • Real Estate Transactions
    • Implement mandatory callback verification or all wire transfers over $10,000.
    • Call the title company using an independently verified phone number.
    • Verify any “change in wiring instructions” emails through a separate communication channel.
  • For Home Renovations
  • For Relocations:
    • Verify moving company DOT number via the Federal Motor Carrier Safety Administration Website.
    • Shop for multiple written estimates to weed out low-ball scams.

Source: Erin Ryan (Horsesmouth)

We are always on the lookout for the latest trends around financial fraud and want to help educate our clients on what to be aware of and how to protect themselves. Please feel free to share any additional fraud schemes you’ve been made aware of with us – thank you!