Real estate scams have grown significantly just in the past year, making it more important than ever for real estate and even title agents to take extra precautions to protect themselves and their clients from becoming victims. In 2017 alone, homebuyers lost more than $969 million to scams, compared to $19 million in 2016, according to Inman. And fraud can potentially occur at almost every stage of the real estate process.
How Do Real Estate Scams Work?
Tactics used by scammers vary greatly. One commonly used tactic involves the criminal fraudulently posing as a real estate agent either in person or over the internet using phony ads. Either way, the intention is often to dupe buyers out of deposits or other upfront fees. Other criminals are more tech savvy and use fake emails or other methods to hack into agents’ email account to access sensitive information on their computer. The scammer can use this information in all sorts of nefarious ways, but one common scam is to use the agent’s email address to get the buyer to wire large amounts of money which they believe will secure their new home.
There are way too many tactics to list them all and besides, as fast as one scam is identified, the scammers have usually found a new approach. But what’s important to understand is that scams usually have one common thread –they are usually avoidable if the victim takes extra precaution before taking any action – especially before giving anyone money, whether in person or electronically.
7 Tips for Avoiding Real Estate Scams
The Federal Bureau of Investigation and the National Association of Realtors® recently participated in a webinar hosted by Realty Executives to provide agents with some actions they can take to protect themselves and their clients from real estate scams. Here are seven tips from the webinar we wanted to share with you, and although some may seem very basic, they are important:
1-Always perform device and app updates as soon as they are available. Most updates are security related, but you won’t be protected from the most up-to-date threats if you’re devices and apps aren’t also updated.
2-Change your passwords often and make sure they are strong. Also, use two-factor, or multi-factor authentication, whenever this extra layer of security is available.
3-Consider air-gapping computers that have sensitive client data. In other words, have one or more computers for sensitive data that are not connected to the internet or that are never connected to any computer that connects to a public or unsecured local area network.
4-Stay up to date on the latest real estate and email scams so that you can easily recognize when someone is trying to scam you or a client.
5-Hire a reputable security expert if you can to identify any weaknesses and fix them.
6-Know your state laws and implement any security measures required by law.
7-Review the security requirements of any vendors you work with to make sure your information cannot be breached through them.
In addition to these tips, it’s also a good idea to educate your clients, as they may not be as savvy as you are about recognizing scams. For example, let them know that you will never ask them to send money through an email link, and that they should never do so unless verifying via a trusted phone number the person requesting the funds. It’s ideal to provide information in writing and require that they sign to indicate they understand. If you can afford it, it’s also a good idea to invest in cyber insurance to protect yourself in case you do fall prey to a scam or breach.
Champion Title & Settlements
Champion Title is a full-service title insurance agency providing title insurance and closing support to streamline closings and increase compliance for our diverse clientele. Champion Title fully embraces technology and is proud to offer clients myriad tools and services to efficiently and accurately assist them with all of their closing needs. For more information, contact us today!