AUSTIN, Texas & GRAND RAPIDS, Mich.--(BUSINESS WIRE)--CertifID, a leading wire fraud protection company, today released its 2024 State of Wire Fraud report detailing a comprehensive examination of wire fraud in the real estate sector. The report, which delves into the latest threats to real estate wire transactions, the impact on consumers, and consumer awareness, comes as multiple government agencies have tracked real estate fraud’s rise and its $446M in resulting annual financial losses.1
Notoriously complicated, real estate transactions can involve up to 10 parties and lack an established, closed system to verify and protect payments. In 2023, low inventory and reduced transaction volumes increased pressure on buyers, sellers, and agents to close quickly. Meanwhile, fraudsters have become increasingly skilled at leveraging public records, breaching broker and title agency systems, and deploying AI-enabled tactics to impersonate real estate professionals using email, text, social media, and phone calls.
These trends have collectively created the ideal conditions for the success of real estate fraud scams seen today.
“Cybercrime rings have taken aim at U.S. real estate transactions at an alarming rate,” said Katie Pierce, Assistant to the Special Agent In Charge, Global Investigative Operations Center (GIOC) at the U.S. Secret Service, “Consumers and their real estate service providers need to take extra precautions in every transaction, including verifying identity and banking details, to ensure payments are made securely and safely.”
Despite the known risks associated with real estate transactions, CertifID's report highlights a significant gap in consumer awareness and education about real estate fraud. The report reveals that one in two (51%) of the surveyed consumers professed to being insufficiently aware of real estate fraud risks prior to closing. The level of education provided to consumers was similarly split with over one in two (60%) reporting to have received little to no education on the risks of real estate fraud from their agent, title agency, or attorney.
The report also detailed the increased risk for consumers aged 65 and older, who were found to be the least aware of real estate fraud than any other age group, with 63% being only somewhat or not aware at all of the risks. Furthermore, this age group was the least likely to have received substantial counseling from their real estate agent, as 75% reported minimal to no education on fraud risks. Because this group represents the largest segment of all-cash buyers, real estate fraud represents a significant and costly risk.2
The lack of counseling highlights a major disconnect in whom consumers believe should be responsible for educating them about the risks of real estate wire fraud with two in three (71%) consumers reporting that they expect their real estate agent, title company, attorney, or other participant in the transaction to take the initiative.
“The real estate industry has a lot of work to do when it comes to educating consumers and putting guardrails in place that protect real estate transactions,” said Tyler Adams, co-founder and CEO at CertifID. “This report highlights the particularly high risks in real estate transactions which involve multiple parties being impersonated, unsuspecting consumers, large sums of money, and lack of strong protections. It’s imperative that the industry comes together on behalf of the consumer, to step up its effort to fight fraud, and to create a safer customer experience.”
To access the 2024 State of Wire Fraud report, click here.
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:
- Federal Bureau of Investigations. “Business Email Compromise: The $50 Billion Scam.” June 9, 2023. https://www.ic3.gov/Media/Y2023/PSA230609
- National Association of Realtors, “Cash Rules,” April 11, 2023. https://www.nar.realtor/blogs/economists-outlook/cash-rules
