12/5

One of the biggest stories of the year? Seller impersonation fraud

As 2023 winds down, it’s (sadly) safe to say this was the year of the seller impersonation scam in the real estate world. One survey said 73% of title agents like us have reported a spike in these attempts this year compared to 2022. 

“Seller impersonation fraud has now grown into the fastest fraud vector that we’re seeing here in 2023 and will likely continue,” said Tom Cronkright in this video. He is the founder of CertifID and is one of our industry’s most sought-after fraud experts. 

What is it?

The easy answer is it’s exactly what it sounds like. Fraudsters attempting to sell properties they don’t own. These scammers tap into public records, selecting properties devoid of mortgages or liens. (Think vacation homes, vacant lots, farmland parcels.) Using this data, these criminals connect with a real estate agent and try to push through a sale before anyone realizes they are not the rightful owner. These “fake sellers” typically avoid face-to-face meetings and only want to communicate via email or text.

Properties are often listed below the market rate to drum up immediate interest. Upon receiving an offer, the fraudulent ‘seller’ is quick to accept, emphasizing their preference for cash deals and fast closings. As we mentioned before, these scammers often don’t want to meet in person – or even on video – insist on using their own notary and use fake ID cards that often seem legitimate at first glance. 

How can we all fight it?

Let’s go back to Cronkright for some advice. This quote was directed at title companies, but it’s good for everyone involved in a transaction to keep top-of-mind. Assume something is fraud until proven otherwise.

“Treat every vacant transaction coming in (with concern) – whether it’s residentially zoned, commercially zoned or agriculturally zoned – it doesn’t matter. You have to raise a flag internally in your process to say, ‘We have to assume that this is a fraudulent transaction.’”  

Both buyers and real estate agents alike can protect themselves from being part of this scam by visiting the property in person and asking questions of the seller that only a rightful owner could answer. 

Realtors should be wary of out-of-nowhere leads for listings that fit the target group and work to verify that they are indeed dealing with the property owner, and should be comfortable demanding a video call in order for the transaction to proceed. Sending a verification letter to the seller’s property can also be a way to ward off this particular scam.   

Rightful property owners can bolster their defenses by using free property monitoring services provided by county recorder offices or other similar local officials. Even putting a Google alert for an address vulnerable to this kind of fraud could give a heads-up if something is amiss.  

The bottom line is if there are concerns that you’re dealing with this kind of fraud, please let us know. We’ll work with everyone involved to verify your “seller” is who they say they are. This scam will certainly stay on our radar for our future dealings, and now we hope it’s on yours too. Just like with any suspicious dealings – if something seems too good to be true, it very well could be.

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