How Long Island homebuyers can avoid having identity theft derail a purchase

Long Islanders preparing to buy a home shouldn’t forget to protect their credit by practicing good cyber hygiene, experts in cybersecurity and lending told Newsday.

With local home prices at record highs and mortgage rates remaining around 7%, interested buyers who do find a house will want to avoid the stumbling block of identity theft getting in the way of their transaction

“Often people find they’re victims of an identity crime when they are trying to move forward in their life, and the crime puts a roadblock in front of them,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center, a San Diego-based nonprofit.

There were more than 1 million reports of identity theft last year, according to the Federal Trade Commission. That was down 6% compared with 2022. But reports of identity theft spiked from around 649,000 in 2019 to nearly 1.4 million in 2020 and have not returned to pre-pandemic levels. 

Here are some tips to protect yourself from identity theft:

Before you’re ready to buy

The U.S. Cybersecurity and Infrastructure Agency advises four main strategies to protect your data online, said Richard S. Richard Jr., the agency's chief of cybersecurity for Region 2, which includes New York, who lives in Blue Point.

It recommends individuals recognize and report phishing, when criminals try to extract information through harmful links, emails or attachments; use strong passwords; turn on multifactor authentication; and update software to address security risks.

Beyond those fundamental elements of cyber hygiene, consumers can: 

Consider freezing your credit. Individuals can freeze their credit with each of the three major credit bureaus — Equifax, Experian and TransUnion — for free, blocking access to their credit report. Creditors seek access to those reports to open new accounts, so this can prevent unauthorized new accounts. You will need to unfreeze your credit before applying for a loan or opening a credit card.

Look up your credit reports for free at annualcreditreport.com. This can help you identify an account you don't recognize. 

“I wish we got more calls from people who said, 'I was just actively checking my credit reports, like I do on a regular basis, and I saw this account I didn't open,' " Velasquez said. “Usually, it doesn't come until, in this case, someone goes to get approval for a mortgage, and they find out they don't have a good credit score and they have these accounts in arrears that they weren't even aware of.” 

Jovia Financial Credit Union in Westbury has created a new cybersecurity arm, Cyganix, to address the threats facing its business and individual members. The credit union plans to offer proactive scanning of the dark web, part of the Web accessible only using specialized software or network configuration, in search of its members email addresses.

If Cyganix finds the email address a member uses for digital banking on the dark web, it will alert the member and offer recommendations to protect their data.

“When you don’t know that you’ve been affected by a breach and your data is being used — not everyone’s looking at every single credit card statement to see that something has been fraudulently put out there — this is going to help a lot of people,” said Daniel R. Ford, chief information security officer at Jovia.

When you're ready to buy

Exchange information through a secure connection. It can be tempting to exchange financial information in a less secure way, such as over public Wi-Fi when you’re in the middle of the process for getting a mortgage, but it’s important to keep cybersecurity best practices in mind, Richard said.

He recommends using a virtual private network, or VPN, if you need to exchange information away from home.

Know who you're talking to. As borrowers get more accustomed to sharing information with lenders, they can be more vulnerable to scams. If you receive a message or call, think twice and consider initiating the call to your bank directly to be sure, Richard said.

“It’s all too easy to panic. You’re trying to lock in a loan rate and you think the mortgage rates are going to go up a point tomorrow, so you’re trying to get it done today,” Richard said. “Most of the time you’re going to think something is sketchy. You’ll notice that this is completely out of character from all the other emails I’ve had with my mortgage lender. Take a breath. Give them a call. Make sure it’s a legit request.” 

After you close

Have a plan in case of the worst. Even in the best of circumstances people can fall victim to fraud, so have a plan and familiarize yourself with free resources, such as those from identitytheft.gov, a website run by the Federal Trade Commission and from idtheftcenter.org, the website of Velasquez’s nonprofit, which offers free assistance for people who believe they’ve been the victim of identity theft.

Don't forget to refreeze your credit. It may make sense to keep credit thawed while shopping for lenders, but consumers can set an automated end date to refreeze their credit. Velasquez says it can be helpful so consumers don’t forget to refreeze their credit as they focus on moving into a new home. 

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.