Wire fraud is one of the biggest threats facing the real estate industry today. Criminals are becoming increasingly sophisticated, using digital communication to impersonate sellers, agents and even title companies. In 2022 alone, the FBI reported $446 million lost to business email compromise (BEC) schemes in real estate, and by 2023, $1.1 billion in total losses was reported due to impersonation scams.
Both buyers and sellers are vulnerable when it comes to wire fraud. More than 1 in 4 real estate buyers and sellers are targeted by wire fraud, and nearly 1 in 20 become a victim. Understanding the risks, recognizing red flags and knowing how to respond can make the difference between a safe transaction and a life-altering financial loss.
Understanding Wire Fraud
Real estate wire fraud typically happens when a scammer tricks a buyer into wiring money to a fraudulent account. The process often involves:
- Finding a target: Fraudsters research public records to identify pending real estate transactions
- Phishing: Scammers gain access to a buyer’s email account to monitor legitimate communications
- Interception: They intercept wiring instructions and replace them with fraudulent instructions using hijacked or spoofed emails
- Hiding the evidence: Once funds are wired, criminals quickly move money through multiple accounts, cash or cryptocurrency to avoid detection
Warning Signs to Watch For:
- Last-minute changes to wiring instructions
- Urgency or pressure to act immediately
- Email anomalies such as misspelled addresses or unusual domains
- Inconsistencies in communication style or tone
How to Prevent Wire Fraud
While technology and criminals evolve, there are steps buyers can take to protect themselves:
- Verify the Seller’s Identity: Use independent contact methods, request in-person or verified video calls and confirm IDs with a trusted title company.
- Use secure communication: Use third-party portals instead of traditional email or phone for wiring instructions. Ensure two-factor authentication is used.
- Confirm wire instructions: Always confirm instructions verbally with your title company and agent before transferring funds. Avoid email-only confirmations.
- Research public records: Check property ownership, addresses and historical sale prices. Compare signatures on recorded documents.
- Carefully choose a title company: Ask about the types of technology and procedures they use to prevent wire fraud, what they do to educate clients and what recovery measures are in place.
What to do if you suspect wire fraud
If funds are accidentally wired to a fraudulent account, acting quickly is crucial. After 24 hours, recovery success rates of stolen funds drop significantly.
1. Contact the Banks Immediately:
Call both the sending and receiving banks. Demand a fraud alert and a freeze on the recipient account. Confirm that other banks involved will also be notified.
2. File an FBI Complaint:
Report the fraud to the FBI’s Internet Crime Complaint Center (IC3). Keep a record of your complaint number for future reference.
3. Call Your Local FBI Field Office:
Request a special agent handling financial or cyber-crimes. Provide the IC3 complaint number and all transaction details.
4. Contact a Lawyer:
A lawyer can help determine if a temporary restraining order is needed to prevent further transfers.
5. Call All Banks Involved:
Speak with fraud prevention teams at each bank. Request fraud freezes, confirm their duration, and keep a detailed log of all conversations and contacts.
6. File a Police Report:
Provide law enforcement with the same information shared with the FBI. Ensure authorities have up-to-date contact information.
Impersonation Fraud in Real Estate
Fraudsters may impersonate property owners using stolen identities, legitimate notarized documents, and fake communications to deceive buyers. High-risk scenarios include:
- Vacant or investment properties
- Sellers pushing for quick, all-cash sales
- Communication only via email or text
- Sellers controlling the notarization process
Buyer Precautions:
- Verify sellers through multiple independent channels
- Use approved notaries vetted by the title company
- Research public records and property history
- Confirm disbursement processes and compare account details with verified documents
AI and Emerging Threats
Advances in AI and deepfake technology make it easier for fraudsters to impersonate sellers and agents via video and voice. At Landmark Title, staff are trained to identify deepfakes and confirm authenticity using movement, live demonstrations, and ID verification.
A Partnership for Protection
At Landmark Title, we prioritize client security by training our team of experts to recognize impersonation scams. We also utilize secure communication portals for sensitive information. For buyers and sellers, staying vigilant, asking questions, and understanding the procedures used by your title company can prevent fraud.
Wire fraud is increasingly sophisticated, but vigilance, education and immediate action can significantly reduce your risk. If you are unsure or have questions, Landmark Title is here to help protect you and encourage a secure real estate transaction.
If you suspect fraud or have questions, contact our Landmark Title Nevada team at [email protected].