Identifying and Avoiding Real Estate Fraud

As fraud continues to target real estate transactions and divert settlement funds, it’s crucial for everyone involved to remain vigilant at all times. This blog highlights various forms of fraud and offers tips to help you avoid being scammed.

PHONE CALL SCAM

“Hello, this is John Doe from Doe Title Company. How can I assist you today?”

“This is Sarah Seller. We’re selling our property at 123 Wishing Well Way, and we’ve recently moved banks. We need the proceeds from the sale wired to our new account. Can I send you the updated wiring details? Are there any forms I need to sign?”

“Certainly! Let me pull up your file and assist you with this.”

The request seemed reasonable: a seller calling to update banking information. So, $75,567 was wired to the new account. Unfortunately, the account wasn’t Sarah Seller’s at all—it belonged to a criminal. The phone call was a fraud.

This isn’t a fictional story; it’s a real case. The Title Company received wire instructions from someone posing as the seller, and funds were transferred into the fraudster’s bank account. While the names have been changed for privacy, this incident illustrates the growing threat of fraud in our industry. Criminals are becoming more sophisticated, with phone calls and spoofed emails still being common tactics.

AI-POWERED SCAMS

Fraudsters are now utilizing artificial intelligence (AI) to impersonate real voices and create deepfakes—fake videos that are increasingly difficult to distinguish from reality. A Florida woman, for example, used AI to superimpose the face of a missing California woman onto her own to pose as the seller during a Zoom call with a title company. Although the scam was unsuccessful, similar attempts are likely to follow. Fraud detection software can help, but human vigilance is still key in spotting fakes.

TIPS FOR PROTECTING REAL ESTATE TRANSACTIONS

For Settlement Agents: Although it may seem repetitive, always verify calls and updates to ensure the integrity of every transaction. As a steward of real estate settlements, you are responsible for making sure all details are accurate and legitimate.

Stay alert for signs of seller impersonation fraud and closely review all remote interactions, such as videos and photo IDs. While fraud detection software can help, there are several telltale signs humans can catch.

5 Tips for Identifying Fake Images & Videos:

  1. Distorted Features: Watch for extra fingers, odd facial expressions, or strange visual distortions.
  2. Eye Scrutiny: Look for unnatural shadows or glares around the eyes.
  3. Audio Sync: Ensure that lip movements align with the audio.
  4. Skin & Hair Inconsistencies: Be mindful of any irregularities in skin or hair patterns.
  5. Background Checks: Cross-check the person’s face with the surrounding environment for inconsistencies.

For Buyers & Sellers: During settlement, patience is key. Rest assured that strong security protocols are in place to protect your funds. It’s extremely rare for wiring instructions to change during a real estate transaction.

If you receive a notice regarding a change in wiring instructions via email, text, phone, or fax, take a step back and verify the information before making any adjustments. Reach out to your attorney, real estate agent, or title agent using a phone number you’ve previously used (not the one provided in the notification) to confirm the change. If you’re closing remotely, make sure you’re using a secure eClosing platform like Pavaso.com.

Final Thoughts

As cybercriminals increasingly use phone calls and videos to carry out their scams, it’s essential for all parties in a real estate transaction to ensure they are communicating with trusted, verified contacts. Always confirm the details of any changes to wire instructions, even if it feels redundant. These extra steps could prevent funds from being stolen and protect everyone involved from becoming a victim of fraud.

Contact Us

From the beginning, our top priority has always remained the same, to look out for the best interests’ of our clients and customers. Give us a chance to earn your business and exceed your expectations. 

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