Cyber Fraud in Real Estate Is on the Rise

As Halloween approaches, we’re reminded of spooky tales and eerie happenings—but a real-world terror is lurking in the shadows: cyber fraud in real estate transactions. This modern-day menace is tricking homebuyers, sellers, and real estate professionals alike, leading to significant financial losses.

The Haunting Statistics

In 2024, the FBI’s Internet Crime Complaint Center (IC3) reported $16.6 billion in losses due to cybercrime. Of that, real estate transaction-related fraud accounted for approximately $174 million. Interestingly, while the overall number of complaints has declined over the past three years, losses per incident have increased, meaning scammers are targeting higher-value transactions.

Sadly, individuals over the age of 60 accounted for nearly $76 million of losses, highlighting that experience and caution alone aren’t always enough to prevent fraud.

Spooky Scams to Beware

Cybercriminals use a variety of deceptive tactics to exploit real estate transactions:

1. Business Email Compromise (BEC) Scams Fraudsters often target high-value transactions like property purchases. They may compromise email accounts, phone numbers, or virtual meeting platforms through social engineering or computer intrusions. The goal is to redirect funds fraudulently, often at the very moment funds are being wired.
2. Phishing & Spoofing Scams
3. Phishing: Unsolicited emails, texts, or calls that appear legitimate, tricking individuals into giving personal, financial, or login information.
4. Spoofing: Attackers disguise their communication to appear as if it’s coming from a trusted source, such as a title company or financial institution.
5. Extortion The unlawful extraction of money or property through threats, intimidation, or coercion.
6. Personal Data Breaches Unauthorized access to sensitive, protected, or confidential data, often using computer intrusions to steal or misuse information.

Protecting Yourself from Digital Monsters

Just as you’d lock your doors against Halloween tricksters, it’s important to protect yourself from cybercriminals:

General Tips

• Verify Sources: Always confirm emails, texts, or calls before sharing information or clicking links.
• Use Strong Passwords: Create complex passwords and update them regularly.
• Enable Two-Factor Authentication: Adds an extra layer of security to your accounts.

Real Estate Transaction-Specific Tips

• Discuss the closing process and wiring protocols clearly with your clients.
• Remind clients never to respond to emails about wiring funds; always call a known number to confirm.
• Instruct clients to avoid emailing financial information.
• Emphasize that it is uncommon for title companies to change wiring instructions via email.

Conclusion

This Halloween, while you’re warding off witches and werewolves, remember that digital ghouls are real. Cyber fraud in real estate transactions is a growing threat, but with vigilance and the right precautions, you can keep your home and finances safe.