Purchasing a home is an exciting milestone in a person’s life, but criminals are increasingly exploiting such transactions through real estate fraud, robbing victims who are often left with little or no recourse.
CertifID’s 2024 State of Wire Fraud report released Tuesday found that 1 in 20 Americans who bought or sold a home within the past three years have been victims of some type of real estate fraud, with the median amount in consumer losses exceeding $70,000 as a result of stolen buyer’s down payments and seller’s net proceeds.
The wire fraud protection company warns fraudsters have become increasingly skilled at leveraging public records, breaching broker and title agency systems, and posing as someone involved in a transaction to steal from unsuspecting consumers.
The latest data from the FBI shows this type of crime, which falls under the category of business email compromise, cost victims a record $446.1 million in real estate transactions during 2022, and CertifID co-founder and CEO Tyler Adams told FOX Business the crime is only accelerating as fraudsters become more sophisticated.
“If you are a first time homebuyer entering into a real estate transaction, you need to be made aware you are entering one of the biggest cybercrime environments that we’ve ever seen today,” Adams said. “You have to be on high alert with every email that you get from your real estate agents, you have to be on high alert with every communication they get from your title company, because at any point, somebody’s communication could be compromised or broken down, and you could start receiving emails that look like they’re coming from one of those trusted parties when they’re not.”
He added, “That’s where we see the consumer get hurt the most, because they received communication convincing them to send money to a fraudulent account or entity, and they believe it to be true.”
It is not just buyers and sellers getting scammed. Adams said title companies are losing a significant amount sending wires to “sellers” that are not actually who they say they are, and submitting funds thinking they are paying off a mortgage – but it is actually a scammer’s account.
“So everybody’s at risk here as a result of typically phishing schemes that lead to email compromises that then lead to these sorts of scenarios,” he said.
Meanwhile, CertifID’s survey found most (51%) consumers were not aware of these types of scams prior to closing on a transaction, and 60% said they received little to no education on the risks of real estate fraud from their agent, title agency or attorney. By Fox Business 02/06/2024