AUSTIN, Texas & GRAND RAPIDS, Mich.--(BUSINESS WIRE)--CertifID, a leading wire fraud protection company, today announced a report that found that real estate transactions are putting U.S. consumers increasingly at risk. The consumer-edition of the State of Wire Fraud report, which is based on proprietary data from CertifID’s wire fraud protection and recovery business, found that consumer real estate payments represent the most frequent target of wire fraud in 2022, with cybercriminals targeting buyer cash-to-close payments in particular.
Following an increase in virtual closings during the COVID-19 pandemic, and a peak in U.S. home sales and median home prices in 2021 and 2022 respectively1, cybercriminals have increasingly sought to exploit real estate payments. Not only has the volume and value of real estate transactions increased, creating more opportunities for fraud, but the criminals themselves have become progressively more sophisticated and global in nature, making apprehension difficult. The real estate sector filed $893M in losses during 2020-2021, according to the Financial Crimes Enforcement Network (FinCEN).2
CertifID’s findings indicate that the success rates in recovering fraudulent wire transactions for home buyers and sellers were one-third that of real estate firms, likely because consumers are typically unable to recognize fraud early enough or know what steps to take in recovery.
Consumer impact findings from the report based on CertifID’s Fraud Recovery Services (FRS) division include:
- 74% of wire fraud recovery requests came from consumers in 2022
- $106,557 was the average wire fraud loss for consumer recovery cases in 2022
- Of the recovery requests for wire fraud in 2022, 41% were buyer cash-to-close transactions, 24% were mortgage payoffs, and 11% were seller net proceeds
- Wire fraud recovery success rates for consumers were one-third that of real estate firms
“Real estate transactions represent some of the largest transactions a consumer will ever make, so losses due to fraud can be devastating,” says Tyler Adams, co-founder and CEO of CertifID. “Consumers need to understand the importance of protecting their transactions; they need to be more aware and educated on how to recognize fraud; and they need to know what immediate next steps to take if disaster strikes and recovery is necessary.”
“Attacks on real estate transactions represent a growing payments risk that isn’t being properly addressed,” said Thomas Cronkright, co-founder and Executive Chairman of CertifID and owner of Sun Title Agency. “Hundreds of consumers a year come to CertifID in an effort to recover stolen funds – their situations are heartbreaking. At CertifID, we do everything we can to help victims get their money back fast. With increasingly sophisticated fraud tactics, from fake property ads to seemingly legitimate payment requests, more needs to be done to educate and protect customers from payment fraud.”
To download the consumer-edition of the CertifID State of Wire Fraud report, click here.
For immediate assistance with wire fraud recovery, visit https://reportafraud.certifid.com.
About CertifID
CertifID is a leader in wire fraud protection. The company safeguards billions of dollars every month from fraud with advanced software, insurance, and proven recovery services. Trusted by title companies, law firms, lenders, realtors, home buyers and sellers, and others, CertifID provides further peace of mind with up to $1M in direct coverage on every wire it protects. Learn more at: www.certifid.com.
Citations:
- Redfin, “United States Housing Market,” February 2023 (URL Reference: https://www.redfin.com/us-housing-market)
- Financial Crimes Enforcement Network, “Business Email Compromise in the Real Estate Sector: Threat Pattern and Trend Information,” January 2020 to December 2021 (URL Reference: https://www.fincen.gov/sites/default/files/shared/Financial_Trend_Analysis_BEC_FINAL.pdf)
