What is the difference between fraud and scams?

It will come as no surprise to you to know that the odds of being hacked today are against us. I’m sure you’ve opened your email inbox or received a text message from a complete stranger – gone are the days when it could have been from a friend of a friend. We know better now.  These “phishing” tactics are from highly skilled “pickpockets” who no longer need to resort to walking the streets to steal from us.  Instead, they’ve gone online with the sole mission of inundating us with emails and texts in an attempt to steal our identity …. our bank accounts … and even to go as far as to take title to our property. How do we protect ourselves from these cyber threats? Well, to start with let’s discuss. What is the difference between fraud and scams?

As consumers, it’s important to understand how these two methods are defined and how far the banks and credit unions will go to help protect us when it comes to our hard-earned money is in jeopardy. The basic difference between fraudulent behavior and scams is unauthorized vs. authorized transactions. 

Let’s make this a little clearer.  If someone gained access to your bank account and made a payment with Zelle® or used funds from your PayPal or Venmo account without your permission, and you weren’t involved in any way with the transaction, this is typically considered fraud since it was unauthorized by you.   Because you did NOT authorize a payment, you are typically able to get your money back from your financial institution if you report the incident in a timely manner.  Duly warned though, banks are getting sick of losing their money and their tolerance is getting less and less.

If you were knowingly involved in the transaction and you gave the “ok” and authorized a payment to be sent, this is typically defined as a scam. Even if you were tricked or persuaded into authorizing a payment for goods or services someone said they were going to provide, but they didn’t fulfill it, this would be considered a scam. Because you authorized the payment, you may not be able to get your money back. A few types of scams involve shopping scams (purchasing tickets or even puppies); fake lotteries; fake charities; mystery shoppers; and other financial scams like cash flips.

Here are some everyday tips to avoid online scams:

  • guard your personal info carefully
  • visit reputable sites
  • use anti-virus software
  • avoid public Wi-Fi
  • when in doubt don’t click on weird looking links
  • bottom line – listen to yourself. If it seems to be too good to be true – it normally is.

 You CAN beat the odds.

And if that wasn’t bad enough it’s now “come down to the wire” when it comes to buying or selling a property.

If you’re one of our customers and are buying or selling your home, at the start of every transaction we will be educating both parties about the growing risks of wire fraud. We will explain that we are the only ones who will be communicating wiring instructions to you – not your lender nor your real estate agent.

If you as the buyer receives a phone call, fax, or email regarding wiring funds, do not call back a number listed on the email or reply back to the email; instead, the safest thing to do would be to forward the email to us for verification.  We will provide both parties with up-to-date contact information at the beginning of the transaction and instruct buyers to use only that contact information. The reason for this extra security: criminals can easily spoof or fake the email addresses and can send fraudulent emails pretending to be the real estate agent, title company and/or lender, including an identical-looking signature block in their email – but with a new phone number. A criminal pretending to be a real estate agent/title company/lender is prepared to answer that number.  We will create a log of all approved parties’ phone numbers and email addresses at the start of a transaction. Phone numbers and email addresses provided later in the transaction (in new email signature lines, etc.) should never be used unless they have been verified by calling a validated phone number. Consider always forwarding, rather than replying, which will require typing in the email address/addresses – this can help avoid accidentally replying to a fraudulent email address. 

Prior to closing, disbursement of buyer’s/seller’s funds will be determined. Wire instructions provided by the seller prior to closing for seller’s proceeds should be verified at closing. Exercise extreme caution when asked to change wiring instructions after having received verified instructions. Stop, look and listen. Last-minute changes are often fraudulent.

Don’t hesitate to ask us at Liberty Title of America what precautions we are taking on your behalf.  Let’s try and beat the odds together. 

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