Tuesday, October 24, 2023
I’ve been thinking about Seller Impersonation Fraud. Did you know there’s an app for that?
Everyone has been talking about seller impersonation fraud lately, and rightfully so. It’s on the rise and the amount of theft in real dollars is no joke.
In every description I’ve read on how to combat it, there are wonderful tips and tricks to help mitigate these kinds of losses. In each of these I also read how easy it is to “comb the public records” looking for properties (usually vacant land) at the beginning of the scam.
But it’s worse than that, folks. Now thieves can literally shop for prospective targets by driving by properties, if they’re feeling industrious. Or, they can shop from the ease of their couch, using an app designed just for the purpose of identifying property owners, their tax bill mailing address, the common address, most recent sales price and transfer date and more. Property theft while still in your jammies. It’s a thing.
Looking at that list, you can see how these crooks can further gain the upper hand.
By now you know to double-check the tax mailing address against the address a transaction seller provides you. But what if they say, “I’m normally at 123 Main St., but we had our mail stolen a couple of weeks ago, so now we’re using a different address.” The app told them what you’d want to verify – so now they’ve pre-planned for that.
You might also be comforted if the contract price seems in line with what you know about the property, from a prior purchase price standpoint. After all, fraudsters usually don’t know the value of the previous sale and odds are their offer might miss the mark wildly high or wildly low (the reddest of flags). But, if they know the last purchase price and when it was purchased, do you think that will help them fool your detection methods? Probably so.
Other things to question about your process might include – what if they casually reference their neighbors or neighboring landowners by name? What if they properly reference the HOA name? You might not realize it, but you could be lulled past healthy suspicion if one or more of these details are offered up in conjunction with the transaction. You can never let down your guard. Not even once. They know how to make it seem legit.
I wish I could tell you that someone would have to pay for access to a county records online system, or physically walk into the courthouse. But you knew that wasn’t true. It can be comforting to think someone would have to have a fair amount of sophistication to pull off seller impersonation fraud effectively, but that’s just not the case. And you’d like to think it would at least be somewhat expensive to engage in this sort of criminal enterprise, but there’s bad news there, too. Apps average about $10 per month. And even less good news, a couple of (less reliable) apps are available for free.
I’m sorry that it feels like you must grill your sellers on so many details of their lives, and selves. But you must. You have to find a way to prove to yourself satisfactorily the identity of every “seller.” And if you can’t prove it to yourself, ask them to prove it by answering Knowledge Based Authentication questions. I’d be willing to bet that even announcing in your Order Welcome Letter to buyers and sellers that they will have to answer Knowledge Based Authentication questions as part of your closing and funding process to help reduce fraud will spook away most imposters. They’ll move to another company that won’t put them through those paces (or threaten to).
Real estate fraud has never been easier. Know your opponent. Constantly update your procedures. Stay ever vigilant.
Until next time,
Mary Schuster
Chief Knowledge Officer
October Research, LLC