If you’re a homeowner, it’s important to stay aware of mortgage scams such as HELOC identity theft. According to a recent Consumer Affairs article, home equity identity theft has become increasingly common.

Here’s how the scam works:

“Some con artists steal consumers’ identities to drain Home Equity Line of Credit (HELOC). These HELOC loans differ from standard home equity loans because a homeowner can borrow against a line of credit. In many cases, con artists pose as customers to open HELOC Internet account services. They manipulate customers’ account verification processes, including rerouting telephone calls, forging signatures, using passwords, and reciting recent account histories. A con artist, for example, may use a consumer’s information to contact a financial institution and request an advance on a account. Once the advance is given, the con artist sends a fax to the financial institution and requests the funds be transferred to another account. When the financial institution receives that fax, it contacts the account holder to verify the transaction. The call, however, is unknowingly forwarded to the con artist, who verifies the account holder’s information to complete the transfer.”

If you’re a HELOC customer, be sure to keep your financial records private. Instead of throwing away past statements and credit offers, shred them. When going to financial websites (such as your bank’s site, your bill pay site, or your student loan site) type the complete URL into your internet browser instead of using an auto-fill feature.

If you notice any suspicious withdrawals from your HELOC account, notify your lender immediately. It’s better to be mistaken than to end up another HELOC identity theft victim.

Tags | Heloc, heloc fraud, HELOC risks, home equity line of credit, home equity loan