What is a Home Equity Line of Credit (HELOC)?
A Home Equity Line of Credit (HELOC) allows you to borrow money against the equity you’ve built in your home. Unlike a Home Equity Loan in which you receive a single disbursement, HELOCs are a revolving credit line based on the equity in your home. As you repay the money you’ve borrowed from the HELOC, it becomes available for your use again.
Homeowners commonly use HELOCs to pay for large expenses like home improvements, education costs and car purchases. Unfortunately, these big checks are very attractive to scammers, who are increasingly exploiting home equity lines of credit to commit fraud. That’s why it’s crucial for every homeowner to understand HELOC scams and learn how to protect yourself.
What is a HELOC scam?
In a HELOC scam, fraudsters commit check fraud to gain unauthorized access to a homeowner’s equity line of credit. Fraudsters can use information available in public records to create fake checks that draw on HELOCs. Scammers also use stolen personal information to commit identity theft, impersonating homeowners and applying for a HELOC in their name. Once approved, the fraudsters can withdraw and steal the available funds.
How to Protect Yourself from HELOC Scams:
- Don’t give away personal information. F&M Bank will never ask for sensitive information like Social Security numbers or account passwords through text or email. If you’re asked to provide this information through an unsecure channel, it’s usually a scam.
- Regularly review your HELOC account. Keep an eye on your HELOC account and financial statements. Unexpected withdrawals or new HELOC accounts in your name without your authorization are clear signs of fraud. Your vigilance could save you from serious losses.
- Monitor your credit report for any new or unfamiliar accounts. This can help you spot fraudulent activity before it spirals out of control.
- Report Fraud to the FBI's Internet Crime Complaint Center (IC3) on their website.
If you have any questions or think you may be a victim of fraud, contact F&M Bank immediately or visit your nearest F&M Bank office.