You've Been Warned: Sneaky New Scams Are Sweeping The Housing Industry

As if the housing market wasn't already difficult enough, new financial scams are sweeping the industry, and these scams can leave homeowners missing thousands of dollars. According to a 2023 Gallup poll, 15% of people reported that they, or someone in their house, was a scam victim in the year prior, while 57% of the respondents reported feeling frequently worried about being tricked by a scammer. To make matters worse, it can be extremely difficult to get your lost money back if you have been scammed.

And the entire situation is even worse when you realize that scams are getting worse every year. According to data from the Federal Trade Commission, nationwide fraud losses hit a record $10 billion in 2023 (a 14% increase over 2022 totals). While investment scams were the largest category for monetary loss in 2023, the No. 1 fraud type affecting consumers was imposter scams. These scams, which are the kind most likely to affect the housing industry, involve scammers claiming to be other (often official) people or representatives of organizations or government agencies.

The FTC reported a noticeable increase in the number of consumer reports for both business and government official impersonators in 2023. It also reported receiving 2.6 million fraud reports from consumers, with scammers showing no signs of slowing down. While scams might be growing more frequent (and financially dangerous), there are ways to protect yourself. For starters, learning about some of the biggest housing industry scams circulating today can help you recognize a potential scam when and if you're faced with one.

The government grant scam can be one of the most difficult to identify as a scam. This is because scammers can go to extreme lengths to appear legitimate. For instance, scammers might create fake online ads for these supposed grant programs, or even use fake phone numbers to appear official on caller ID. Government grant scams start as seemingly legitimate government-sponsored programs to help people with anything from paying for education to funding home repairs to offsetting unpaid bills. These scammers will then ask for increasingly personal information, like your Social Security number or banking data. This information will more than likely be requested to "verify eligibility" or ensure qualification. Some of these imposters might even tell you they require an upfront payment for a grant application.

Perhaps the easiest way to protect yourself from a potential government grant scam is to remember that the federal government won't ever reach out to you directly for a grant, period. While there are legitimate government grants available (for specific purposes, which are more often for nonprofit or related organizations rather than for individuals), they require applications and vetting through the official Grants.gov government website. These grants will not lead the federal government to text or email you asking for personal information. In fact, no government agency will ever demand payment for a grant either, so if you find yourself on the receiving end of any sort of financial demand, it's definitely a scam. Plus, remember to hang up immediately if you receive a call using any of these phrases.

Home maintenance can be a very necessary (if very expensive) part of homeownership. From new roofing to plumbing to curb appeal projects (remember not all home improvement projects guarantee an ROI), these improvements can add up fast and could leave you more vulnerable to the tempting offer of affordable home improvement work. This is where housing scammers enter the equation.

Whether posing as individual contractors or as representatives of home improvement companies, these scammers are likely to offer anything from low-price services to seemingly popular products in order to convince you of their legitimacy and gain your trust. However, many of these scammers use high-pressure sales tactics or even upfront payment plans to scam homeowners out of their money. Despite their promises, these scammers ultimately disappear before any work begins, leaving you without your necessary repairs and without your money.

With this said, be wary of door-to-door sales pitches and do additional research on any potential contractor or company you might be interested in working with. Looking into past customer reviews, and even getting competitive quotes from multiple contractors can prove especially important when investigating whether or not you're dealing with a reputable person or company. As well, be vigilant in the wake of any natural disasters that might have affected your home and/or area, as scammers will often use extreme situations in order to take advantage of vulnerable populations.