Identity thieves are now preying on homeowners who have significant equity in their homes. As per a report from the Identity Theft Assistance Center, a non-profit industry group, identity thieves are targeting individuals with good credit because such people often have large untapped home equity.
HELOC or home equity line of credit is almost as easy to open as a credit card account which explains why it’s an ideal vehicle for the fraudsters who have proper financial information of the victim. In a typical scheme, the con artists use stolen identification to apply online for a line of credit. Then they request the bank to wire the funds to their accounts, providing their own contact information and the bank unknowingly calls the perpetrator to verify the fund transfer.
One can’t deny the fact that credit lines like HELOC are typically “big pools of money” and if consumers are not using the account and also do not regularly check it then without their knowledge and consent the pool can drain quickly. The worst scenario can be the con artist selling the home without the knowledge of the homeowner.
Though there is a glimpse of light for such victims – they can get back the money by the lender if a bank investigation confirms fraud. However, lawyers who represent victims of identity theft said such solutions do not often come easily.