Shotgun Scam
Shotgun Fraud, or Shotgun Scam, is a method of fraud in which multiple loans, mortgages, fraudulent cheques, or other financial withdraws are made in a very short amount of time. The scam works by going fast enough that it is over before the transactions are entered into the public record where banks and other institutions can view them.
There are two main types of shotgunning, Cheque Shotgunning, and Home Equity Shotgunning.
In the former, the same cheque is cashed at multiple banks, or at multiple branches of the same bank via online methods (ie. mobile banking) before the cheque is officially posted.
In the latter, multiple home equity loans are taken out against the same property with multiple banks, with them all closing within a short window of each other. This works because the credit bureau tradeline will not appear for 30 days, so the other banks cannot see that money is already being borrowed against the property.
There are two main types of shotgunning, Cheque Shotgunning, and Home Equity Shotgunning.
In the former, the same cheque is cashed at multiple banks, or at multiple branches of the same bank via online methods (ie. mobile banking) before the cheque is officially posted.
In the latter, multiple home equity loans are taken out against the same property with multiple banks, with them all closing within a short window of each other. This works because the credit bureau tradeline will not appear for 30 days, so the other banks cannot see that money is already being borrowed against the property.
Shotgun Scam by Smudgly December 1, 2019
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