Real estate fraud is growing in the United States. There are two main types of fraud: title theft, where criminals impersonate property owners and transfer titles to themselves or third-party accomplices, and wire fraud, in which criminals steal funds during real estate transactions. Be on the lookout for the following.
Faces of cyber criminals
Cybercrime involves stealing money through stealth tactics, and the perpetrator is usually overseas. Because the stolen money is sent to foreign bank accounts, prosecution is beyond the reach of US law enforcement. Thus, cyber thieves operate with virtual impunity.
Common types of real estate fraud
The most common types of fraud occur in these situations:
- Fraudulent title transfers steal ownership from legitimate owners. In the most common scheme, a criminal researches public records of property owners, generates a fake ID, steals an owner’s identity, and executes a quitclaim deed, transferring the title to himself or an accomplice. The thief may then contact an agent to sell the property, take out a loan, or lease the property and collect the payments. Vacant, fully paid-for, and unattended properties are prime targets.
- Fraudulent money transfers dupe consumers or vendors in a real estate transaction into wiring funds to the criminal’s bank account instead of the legitimate recipient. A perpetrator misrepresents himself as the title company to steal down payment and closing cost funds from the buyer, or he impersonates the seller to the title company, causing settlement funds to be sent to the thief’s bank.
- Property owners or rental managers are targeted in schemes to divert monthly rental payments to a criminal.
Vectors of attack
There are four vectors for stealing personal identification and financial information:
- Spoofing is when thieves research the Internet, looking for pending sales or targeting the email servers of real estate brokers, title companies, and mortgage lenders to intercept emails and spoof vendors and consumers.
- Phishing emails mimic legitimate vendors to the targeted victim. Thieves can impersonate the real estate agent, the title company, or the mortgage lender. Their emails request bank information or direct funds to a bank owned by the criminals. Phishing emails are sometimes AI-generated.
- Vishing is when a thief calls the consumer, posing as a representative from a real estate broker, title company, or mortgage lender.
- Smishing occurs when a criminal sends fraudulent text messages to a consumer, posing as one of the vendors involved in a transaction.
Protect yourself from real estate fraud
- To protect your property title from theft, contact your county clerk’s office to see if a program can alert you by email of any activity regarding your property title. It also pays to have an owner’s title policy to cover costs associated with defending your title from thieves.
- When you’re involved in a real estate transaction—as the buyer or the seller—only email your agent, title company, and other vendors at their secure company email accounts. Do not respond to inquiries from online accounts such as Gmail, Yahoo, or Hotmail. Even with emails that appear to be from legitimate vendor email accounts, study the email address and watch for one character being different or a suffix (after the dot) that is different.
- Connect with a specific person as your “go-to” contact at your real estate agency and the title company. If you receive unusual messages, especially those stating a last-minute bank change, confirm requests for sensitive information directly with the contact person.
- You can check any suspicious cell phone numbers at phonevalidator.com and email them at whatsmyipaddress.com. You can also verify passports at emvlab.org.mrz/.
- Report wire fraud to reportafraud.org and complaintic3.gov.
Related – The Nightmare Cybercrime Targeting Home Buyers
