Survey Shows Consumers Need More Wire Fraud Education
February 13, 2024
Last year, title agents across the country worked to absorb and implement changes recommended by the ALTA in its Title Insurance and Settlement Company Best Practices. In addition to significant consumer education and mitigation planning resources, the latest ALTA Best Practices further specified the use of verification services to combat wire fraud.
All of these resources are meant to provide layers of protection against accelerating attacks. The latest 2024 State of Wire Fraud report from CertifID demonstrates both the progress and challenges for the industry in addressing the risks.
Despite continued elevated interest rates, housing inventory remained low in 2023—reducing transaction volumes and increasing pressure on buyers, sellers and agents to close quickly. Meanwhile, fraudsters have become increasingly skilled at leveraging public records, breaching lender, broker and title agency systems, and deploying AI-enabled tactics to impersonate real estate professionals using email, text, social media and phone calls.
The 2024 State of Wire Fraud Report includes findings from a November 2023 online survey of 650 U.S. consumers who had bought or sold a property in the prior three years. The findings indicated a significant gap in consumer awareness and education.
51% of consumers were not adequately aware of wire fraud at the start of the closing process.
71% of consumers believed it was not their own responsibility to be educated. They looked to their real estate agent, title agent, attorney, lender and other real estate professionals to educate them.
The risks were more pronounced for consumers aged 65 and older, who were 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.
As losses continue to climb, federal law enforcement has issued public service announcements and continues to educate the public about real estate fraud scams.
“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.”
Last year, CertifID customers identified $2.4B in suspected fraud. These transactions flagged as suspected fraud were processed by organizations of all sizes, from small law firms all the way up to national title and real estate enterprises. This finding indicates that a combination of education, technology and response services can provide useful prevention. A more secure future for title operators and clients is possible with action.
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