Scam Alert: Title Fraud is on the Rise

A new scam – the latest embodiment of identity theft – has surfaced recently. Real estate title fraud, also known as title theft, occurs when someone changes the ownership of your property to themselves without your knowledge, forging your signature on a deed and recording it. The scammer is then free to sell the property right out from under you.

It comes as no news to real estate professionals that consumer real estate payments, especially wired cash-to-close payments, were the most frequent target of cybercriminals in 2022, according to a report from CertifD. The average loss to consumers amounted to more than $106,000 that year.

In keeping with this trend, Toronto police reported multiple cases of title fraud in the last months of 2022. In one case, a woman had fraudsters gain access to her condo while she was living abroad and sold it, while impersonating her, for $970,000.²

Title theft is becoming increasingly widespread. While three people were arrested by Toronto Police in January of this year and charged with fraudulently selling property, Chicago Title Company said it is currently dealing with more than 30 claims from targeted consumers in the Metro Vancouver area.

Though the first cases of title theft took place in Canada, police in Detroit, Michigan are investigating more than one recent case in which renters have fallen victim to fraudsters falsely claiming to be the landlord.

As trusted advisors to buyers and sellers, real estate agents need to double down on warnings against cyber fraud, particularly as closings draw near. Buyers should be instructed, before wiring funds, to call the intended recipient at a number they know is valid in order to confirm their instructions, and to be wary of any last-minute request to change the wiring instructions.

Authorities also suggest advising clients to:

• Make identity theft more difficult by shredding all bank documents, bills, or other paperwork that shows your bank accounts, Social Security number, or other personal information.
• Make multifactor-identification processes a standard part of any real estate transaction, and/or request an alert on any title activity on your property.

This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax, or investment advice. You are encouraged to consult your legal, tax, or investment professional for specific advice.

Sources:

1 – CertifID: Wire fraud report shows elevated risk remains | News | The Title Report
2 – Fraudsters impersonating homeowners to sell real estate on the rise since the pandemic – The Globe and Mail

Source: SunBelt Title | Bobbi Pronin