by Nick Gromicko, CMI®, InterNACHI® and CCPIA Founder, and Kate Tarasenko
As with any industry, home and commercial property inspectors are vulnerable to Internet scams. The FBI’s Internet Crime Complaint Center (IC3) receives many such complaints each year. In 2016, the IC3 received nearly 300,000 complaints, with financial losses estimated at $1.3 billion. These figures don’t include unreported crimes of this nature, but they do demonstrate the prevalence of Internet scams that target individuals and small businesses alike.
InterNACHI® members recently alerted InterNACHI's Legal Team to one type of business fraud in which the potential client asks the inspector to charge an additional sum – on top of the inspection fee – to a credit card, and then forward the excess funds to the client so he/she can take care of other pressing issues. Often, the scammer is using a stolen credit card, and the bank receiving the excess funds is located overseas. The credit card issuer will eventually charge back the amount paid, so the inspector will be out of luck. This is known as an overpayment scheme.
Here are some traits that are common to the most popular Internet scams targeting property inspectors and other small businesses:
- The scammer needs the inspection (or other service) conducted immediately.
- The scammer is unable to meet with the inspector in person.
- The scammer claims to be able to communicate only via email, and seldom (if ever) by phone. They try to justify this sole mode of contact by claiming to be deaf or hard of hearing, laid up in the hospital, or constantly traveling.
- The scammer presents a fabricated story, such as an impending surgery, a death in the family, or some other reason that the additional funds are needed, that the scammer cannot meet the inspector in person, and that the home inspection must be performed very soon.
- The scammer offers to pay the inspector a higher fee as an incentive to facilitate the unusual transaction.
- The scammer does not address the inspector by name, but instead writes “Dear Inspector” or something similar, likely because he's BCC'ing multiple recipients in order to cast a wide net.
Here are some tips to avoid being scammed:
- Never charge your client or accept from him/her more than your inspection fee(s).
- Have the client execute a Pre-Inspection Agreement before performing the inspection.
- When in doubt, get third-party verification for the legitimacy of the inspection, such as by verifying the MLS details, confirming with the listing agent that the name of the prospective client belongs to either the seller or a prospective buyer, verifying property ownership via the County Clerk and Recorder's Office, etc.
- Always require contact information other than an email address. When a prospective client claims to be unreachable except via email, this should raise a red flag as to their true identity.
- Avoid taking on a client whose request is overly detailed at the outset – especially when it involves private information or discusses physical infirmities, which most people would consider too personal to relay to someone unknown to them, particularly via email – and which also mentions additional funds.
- Keep your business and personal email accounts separate.
- Post about any suspicious prospective clients to InterNACHI's Message Board to alert your colleagues.
Always use common sense when conducting business online. Remain professional in your communications, regardless of your suspicions. And if you believe a scammer is targeting you, please email InterNACHI's Legal Team at email@example.com.
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