Real Estate Trends & Advice: More About Wire Fraud

More About Wire Fraud
By Jim Palmer Jr.

Is wire fraud still a thing in today’s real estate environment?  According to industry experts, it is more prevalent than you might think and continues to get worse.  Recent FBI data shows that nearly one-quarter of consumers engaging in real estate transactions were targeted by suspicious or potentially fraudulent activities and adversely impacted over 2,000 victims in 2022.  The same report also noted that homebuyers have a 1-in-20 probability of being hit with an attempt at wire fraud during a property closing.

Who are these bad actors?  According to expert Tom Cronkright, “There are two sides to this coin.  The first appears to be internationally orchestrated – either syndicates, cartels, or possibly nation states, and those appear to be the organized crime layers that are deploying the strategies and resources that lead to somebody being convinced they’re going to wire funds to do an individual they believe is a trusted party. And then it shifts quickly to a domestic network, when it comes down to money mules and money launderers that have accounts open that are ready to receive those funds when they’re transferred.” 

The following stats by Tom Cronkright, (who is co-founder of a company called Certified), are startling!  He says, that “51% of consumers were either somewhat or not aware of wire fraud risks in real estate transactions – but only 29% of respondents to the report’s polling believed it was their responsibility to get educated about wire fraud.”

Real estate professionals are extremely aware of this danger to their clients and most are diligent to educate and warn their customers in writing that their savings could be at risk, since most wire fraud that occurs in today’s real estate environment involves scammers posing as trusted real estate professionals. According to the same pollster quoted above,” Data shows that 22% of fraudulent communication appears to come from the victim’s real estate agent.”

Phil Hall of WRE News warns about the cutting-edge technology that is AI generated replication of people’s voices.  “If they had just 10 seconds of your voice (such as from a voice message), they could put it into a multitude of programs now and get a voice to say whatever they want.  They could just drop it into voicemail wiring instructions that this is so-and-so broker or so-and-so from the title company.  AI is going to cut through some of the assumptive layers that we have about identity confirmation.  The use of these technologies is going to further challenge how we think about confirming someone’s actual identity.”