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With high interest rates, many homeowners are turning away from refinancing and toward home equity lines of credit (commonly known as HELOCs) to access the equity in their home. As such, fraudsters are seeing this as a new opportunity to take advantage of homeowners. This is especially true due to mortgages and HELOCs being part of public records – giving criminals a foothold into researching their potential victims.
Keep reading to learn how you can protect HELOC and yourself.
What is HELOC Fraud?
HELOC fraud happens in two instances:
- When a fraudster makes a draw on a HELOC that is not their own.
- When they open a fraudulent HELOC using collateral (aka a house) that is not their own.
They do this in various methods:
- Creating or writing counterfeit HELOC checks by forging a signature and depositing the check into their account.
- Utilizing personal information to change online account login credentials and make a draw from the account. They also may do this by placing malware on a phone or computer to record login information.
The goal of the criminal is to take the money, move it into their account, and then disappear.
How do you protect yourself from HELOC Fraud?
Protecting yourself from HELOC fraud is very similar to how you can protect yourself from other identity theft and fraud scams.
1. Keep your devices safe.
Make sure you have appropriate malware protection installed, that you are on the lookout for phishing or pharming emails designed to steal your info, and that you are using secure sites to shop and pay bills.
2. Secure all financial documents.
From HELOC checks to bank statements, each piece of paper with financial information on it could be a liability if it falls into the wrong hands. Keep checks in a safe and secure place — somewhere other than your purse or car dashboard — and when you discard old financial documents, make sure to redact them of all information and toss them into a shredder first.
3. Monitor your online account regularly.
Keep a close eye on all transactions going in and out so you can spot anything out of place. Also place account alerts on your account, so you get notified of any withdrawals or deposits that take place.
4. Enable multi-factor authentication and strong passwords.
Placing a two-step verification on your account log-in will add an extra layer of security – such as a code sent to your phone.
5. Monitor your credit regularly.
You can access your free credit monitoring reports to keep up with your HELOC balance. You may also add a credit freeze to your report to ensure no lines of credit are opened without your authorization.
At Spero, our priority is your financial well-being and the safety and security of your finances. We want to make sure you’re protected however we can, and we’re here to help make sure that your accounts are safe and secure. And remember, we’ll never ask for sensitive information by text or email. If ever in doubt, please contact us immediately.
