Fraud Prevention

Cyber fraud, wire fraud, and seller impersonation schemes are growing threats in the real estate industry. To protect your business and your clients, it’s critical to understand how these frauds occur and to adopt strong cybersecurity and fraud prevention measures. This page provides important information, actionable steps, and helpful resources to safeguard your transactions.

Seller Impersonation Fraud

Seller impersonation fraud involves criminals posing as property owners to sell or mortgage properties without the true owner’s knowledge. This scam often targets vacant land, second homes, and absentee-owned properties.

These are some of the common red flags that you need to watch out for:

Property that's listed well below fair market value

Sellers are unwilling to meet in person

Documents are notarized outside of vetted networks

Full Red Flags of Fraud List

Wire Fraud

Wire fraud scams in real estate often involve Business Email Compromise (BEC), where hackers alter wire transfer instructions to steal funds.

How to Protect Outgoing Wires:

Create clear outgoing wire procedures
Independently verify wire instructions over the phone using trusted contact information
Use digital verification tools like RynohVerifi to match account names to intended recipients

How to Protect Incoming Wires:

Educate clients about the specific dangers of wire fraud
Include wire fraud alerts in your e-mail signatures
Instruct clients to call your office directly to confirm wiring instructions and confirm receipt

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Cyber Fraud

According to the FBI’s IC3 unit, Business Email Compromise (BEC) is the overwhelming scam of choice directed at the real estate sector. This is where bad actors try to either trick an email recipient into clicking a link that installs malware through a download or to divulge classified information, both for financial exploitation. Although BEC is the most common tactic undertaken against our industry, it is vital that you take steps to ensure you are as prepared as possible for cyber-attacks of all kinds

How to Protect Yourself Right Now:

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Train employees to recognize email scams

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Hover over hyperlinks before clicking

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Expand email windows to view full sender addresses

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Stay cautious when reading emails on mobile devices

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Test your team’s scam-spotting skills for free at PhishMe

Immediate Cybersecurity To-Do List:

1. Install robust spam filters and spoof detection
2. Require multi-factor authentication on all accounts
3. Enforce strict password policies
4. Conduct weekly system patching
5. Implement the “3-2-1” backup strategy
6. Hire outside IT experts for vulnerability scanning and penetration testing
7. Ensure compliance with your state’s cybersecurity regulations

The Rise of Deepfake Fraud

Technology has given scammers new tools. Deepfake audio, video, and identity fraud are beginning to emerge in real estate transactions.

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Sellers who insist on virtual-only meetings but refuse video calls

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Fake documents appearing to be notarized or authenticated by government offices

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Voice calls where the speaker sounds unnatural or distorted

Read the latest research from MIT Media Labs on detecting deepfakes