Friday, December 31, 2010
Prime season for home equity scams
As consumers' attention shifted to their busy holiday schedules in the past weeks, thieves were busy scamming home equity lines of credit. During a time of year when many people slack on monitoring their finances for unauthorized purchases or accounts opened in their names, it's prime season for thieves.
Brad Mundine, regional manager for CUMIS' credit union protection and risk management division, says home equity line of credit (HELOC) account losses from theft increased significantly in 2010. (Credit Union National Association Dec. 29)
A HELOC is a line of credit in which a person borrows against the equity in their home. It can be used for whatever purpose the borrower chooses.
Recent scams have involved thieves making transfers or wires from existing customer HELOCs to other accounts or opening new HELOCs on which they transact. If a criminal has obtained access to an individual's personal information, it may be possible for them to pass through financial institutions' safeguards against unauthorized wire transfers. Once wired out of the account, the money is not often recovered.
People may learn they've fallen victim to this crime when they notice the fraudulent transactions appearing on their account, are notified by their financial institution of a late payment on their HELOC, or it shows up on their credit report.
To protect your identity and help prevent losses, diligent monitoring of account statements and activity and credit reports is necessary, along with safeguarding your sensitive personal and financial information.