HELOC fraud: how it happens and how to protect yourself

Your home equity is a target because it's large and, once a line is open, easy to move. Most HELOC fraud is caught by owners who watch their accounts and act fast.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

The main types of HELOC fraud

• A HELOC opened in your name. A thief uses your stolen identity, sometimes with forged documents, to apply for a line against your home. In rarer title fraud cases, forged deeds transfer the property on paper so the fraudster can borrow against it.
• Account takeover on an existing line. Criminals get into your online banking through phishing, a data breach or reused passwords, change your contact details, and move money out of your HELOC. Because many lines sit unused, a draw can go unnoticed for weeks.
• Stolen or counterfeit HELOC checks. Some lines come with checks. Stolen or forged checks can draw on the line.
• Wire and closing scams. Around closing, scammers send emails that look like they come from your lender, title company or attorney, with "updated" wire instructions. Money sent to the fake account is often gone within hours. The CFPB warns that email is never a secure way to send financial information.

Warning signs

• Draws, transfers or checks on your HELOC that you don't recognize.
• A statement, payment notice or welcome letter for a line you didn't open.
• Statements that stop arriving, or a notice that your email, phone or address changed.
• A new hard inquiry or home equity account on your credit report.
• A sudden jump in your balance or minimum payment.
• Last-minute changes to wire instructions, especially by email or text.

How to prevent it

• Check your credit reports. Get free reports from all three bureaus at annualcreditreport.com and look for accounts and inquiries you don't recognize.
• Freeze your credit. A freeze at Equifax, Experian and TransUnion is free and blocks most new credit from being opened in your name. Lift it briefly when you apply for credit yourself.
• Ask your lender for alerts. Ask whether it can notify you by text or email of every draw, profile change and new payee. Use strong, unique passwords and two-factor authentication on the account.
• Secure HELOC checks and cards. Store them like cash, and shred any you won't use.
• Sign up for a property fraud alert where offered. Some counties run free programs through the county recorder or clerk that notify you when a document is recorded under your name.
• Verify wire instructions by phone. Call your lender or title company at a number you already have, not one from the email, before sending money.
• Close lines you don't need. An open, unused HELOC is available equity a thief can try to reach. If you keep one as a backup, watch it the same way you'd watch a checking account.

Example: why speed matters

Here's an illustrative example. A homeowner has a $150,000 HELOC with a $0 balance. A thief takes over the online account and draws $40,000 on day 1, then another $40,000 on day 3.

• If draw alerts are on and the owner calls the lender on day 1, the lender can freeze the line before the second draw. Exposure: $40,000, which the lender investigates.
• If the owner finds out from the monthly statement 25 days later, both draws are done and the thief may have tried more. Exposure: $80,000 or more.

At an assumed 8% rate, $80,000 accrues about $80,000 × 8% ÷ 12 = $533 of interest a month while the dispute is sorted out. Prompt reporting also matters because dispute rights are tied to deadlines that usually start when you receive your statement.

What to do if it happens

1. Call your lender right away using the number on your statement or the lender's website. Ask it to freeze the line, reverse unauthorized draws and open a fraud claim. Follow up in writing.
2. Report identity theft to the FTC at IdentityTheft.gov. It creates an identity theft report and a recovery plan.
3. File a police report with your local department. Lenders often ask for it.
4. Freeze your credit or place a fraud alert with all three bureaus, and dispute any accounts you didn't open.
5. Check your title with the county recorder to see whether anything was recorded against your home.
6. If you wired money to a scammer, call your bank immediately and ask for a wire recall, then file a complaint with the FBI's Internet Crime Complaint Center at ic3.gov.
7. If the lender doesn't resolve it, submit a complaint to the CFPB at consumerfinance.gov/complaint.

For how legitimate draws work, see how to draw from a HELOC. Lenders can also freeze a line for their own reasons, covered in can a lender freeze your HELOC, and does a HELOC show on your credit report explains what to look for on your reports. To see your own numbers, get your HELOC rate from Shawn. A HELOC is secured by your home, and this page is general information, not legal advice.

Questions people ask

Can someone take out a HELOC on my house without me knowing?

Yes, though it's rare: a thief can open a HELOC on your house using a stolen identity and forged documents. A credit freeze, regular credit report checks and a county property fraud alert, where offered, make it much harder.

Am I responsible for fraudulent HELOC draws?

Generally, borrowers who didn't take part in the fraud and report it promptly are not held responsible, but the outcome depends on your lender's investigation and how quickly you reported it. Report as soon as you notice.

Does a credit freeze stop someone from drawing on my existing HELOC?

No, a credit freeze doesn't stop draws on a HELOC you already have; it only blocks most new accounts. Protect an existing line with lender draw alerts, strong passwords and two-factor authentication.

Should I close a HELOC I don't use?

Usually, if you don't need it: closing an unused HELOC removes a target for fraud. If you keep the line as an emergency backup, turn on draw alerts and watch it the way you'd watch a checking account.

How do I verify wire instructions for a HELOC closing?

Call the lender or title company at a number you already know, not one in the email, and confirm the account name and number before sending anything.

More in HELOC guides

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• HELOC on a paid-off house
• HELOC if you're self-employed
• HELOC on an investment property
• HELOC on a second home
• HELOC after bankruptcy
• Using a HELOC in a divorce
• HELOC for retirees

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