As COVID-19 lingers, fraudsters having continued success targeting borrowers

In remarks to the Senate Judiciary Committee on June 9, the assistant director of the FBI’s Criminal Investigative Division described for lawmakers a range of schemes being used to defraud unsuspecting Americans during the coronavirus pandemic. Rather than being brought under control, Calvin A. Shivers explained to the SJC that the threats have only become more frequent and sophisticated.

“Moreover,” Shivers said, “they adversely affect the United States by destabilizing our financial system and institutions and harming people at higher risk, including older adults and people with underlying medical conditions.”

Shivers provided multiple examples of fraud schemes that are still proving effective:

• Business owners have been unable to apply for PPP loans because their employer Identification Numbers were stolen and used for fraudulent loan applications
• Fraudsters who offer to broker the sale of personal protective equipment have sent nothing in return
• Business email compromise schemes, similar to phishing scams, have fooled businesses into sending information to what they think is a familiar email address
• Through dubious work-from-home and dating websites, people are being turned into ‘money mules’ whose bank accounts criminals use to launder money

According to Michael Scheumack, senior vice president of marketing for IdentityIQ, home buyers can be particularly vulnerable to such scams, especially if they’re doing much of their communication online or over the phone and sharing information like Social Security and bank account numbers. Mortgage professionals can play an important role in preventing these scams by educating their clients about the scams themselves and how not to fall prey to them.

In addition to taking extra precautions when emailing documents that contain personal information, such as password-protecting attachments, Scheumack says consumers also need to make sure they are storing their sensitive information properly.

“The best way to send sensitive info is to request a secure place to upload the files,” he says. “If a consumer used their smartphone to scan their W-2 or tax return, make sure those documents are deleted from the phone’s files right away. If not, and you lose your phone or it’s stolen, someone else might have access to your personal information.”

As Scheumack explains, borrowers may have their guard down as they go through the home loan process because they are expecting to share their personal information.

“They know their tax information, pay stubs, etc., are going to be requested,” he says. “But when it comes to such sensitive information, now is the time for them to be especially cautious when sharing it.” Scheumack says borrowers should always be double-checking senders’ email addresses, ignoring unexpected attachments, and not clicking on hyperlinks before verifying their authenticity. 

“A good rule to follow is to contact the lender, underwriter or real estate agent to confirm they sent the email before moving forward,” he says. This may seem like common sense to most readers, but frazzled homeowners can easily miss these small details. They need to know that their lack of vigilance can have catastrophic results.

Scheumack says mortgage professionals should urge their clients to keep their guard up even after they’ve purchased a home.

“This is when homebuyers receive the most amount of unsolicited email, mail and phone calls,” he says, “some of which can resemble communication from their new mortgage company but in reality could be another attempt to steal personal information.”