SCAM ALERT: 4 things to know about seller impersonation fraud
A recent survey showed that less than half of recent homebuyers said they were well aware that wire fraudsters could threaten their transactions. It was an alarming statistic for everyone in real estate - especially since 10% of those same people said they believe a cybercriminal targeted them during their closing process.
It’s clear that more education is needed when it comes to these threats, so the Title Resource Network team is going to focus our first blog on seller impersonation fraud. Why? Because it was the hot new scheme in 2023, and it’s only getting more popular right now.
How does it work?
Here’s a recap. Scammers look over property deeds online, searching for vacant lots, second homes, unimproved land, etc. Then, they pretend to be the property owner, creating a fake ID and using it to convince a real estate agent to list the property. If successful, they push for a quick, cash-only sale, often using a remote closing.
How common is it?
In a word, very. Consider what industry fraud expert Tom Cronkright told HousingWire last December. “Well, I’m in West Michigan, and just in our market, (we’ve) seen 35 confirmed cases of seller impersonation since March. And I was made aware of another two today.” An earlier 2023 survey done by Cronkright’s company found that 54% of real estate professionals reported having experienced at least one seller impersonation fraud attempt within the past six months. (This company, CertifID, also compiled the report mentioned in the introduction of this blog.)
How may this fraud evolve this year?
In the same article, Cronkright warned about cybercriminals using the power of AI for evil, meaning having the ability to write more believable emails or even mimic voices in phone calls. (Insisting on a phone call with clients, especially a video one, is one way to help verify identification.) Plus, these fraud attempts will continue to grow as long as the con remains successful.
What should we be doing to fight this fraud?
It seems simple, but awareness of this scam and others like it is the first step. If you’re a Realtor, be extra vigilant about verifying a seller’s identification, especially if it seems like a listing lead came from thin air. In other words, take a second to make sure your sellers are who they say they are. In addition, keep talking with your buyers and sellers about all the forms of fraud they should know.
Our professionals throughout the Title Resource Network are always working hard to keep your transactions safe and secure. Remember, you can never be too careful when it comes to fraudsters! Reach out to the TRN team anytime you need us, especially if you need to verify whether new information or direction is legitimate or not.
