Unmasking Seller Impersonation Fraud: Actionable Strategies & Examples

Key Takeaways

1. Always verify identity: Don't rely on email alone. Use phone calls, video meetings, and document checks to confirm the seller's identity.
2. Watch for red flags: Be wary of sellers who are in a rush, have discrepancies in their documents, or only communicate through email.
3. Leverage technology: Use tools like CertifID to verify identities securely and track interactions to prevent fraud.

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Seller impersonation fraud is escalating, tricking even the sharpest eyes in the real estate game. Last year, an alarming 77% of professionals reported a spike in these scams. 

Our recent "To Catch a Fraudster" series turned the spotlight on this scam, featuring insights from Tom Cronkright, Executive Chairman and Co-Founder of CertifID, and Rachel Petrach, Chief Closing and Compliance Officer, from Knight Barry Title Group. 

Wondering how experts are staying safe amongst the rise in seller impersonation? Here are key learnings from their discussion.

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Recognize the increased threat landscape

The fraud landscape is evolving rapidly. Tom noted, "It's turned into this 'See something, say something' forum. The need for constant vigilance and updated knowledge is paramount.”

Every real estate professional today must be prepared to combat real estate fraud, because fraudsters aren’t rolling over. In fact, they’re becoming more bold, using AI and other technologies to infiltrate your transactions faster and more efficiently.

Rachel explained, "These fraudsters are becoming more sophisticated, using advanced techniques like phishing emails, fake IDs, and social engineering to gain trust." She shared an example where a fraudster created a fake email address that closely resembled the legitimate seller's, making it difficult to detect at first glance.

And it’s not just a smash-and-grab operation. The criminals are getting smarter, waiting to strike at the right time and knowing how to slowly win your trust to steal your funds.

As Tom noted, "These criminals are looking to exploit the entire transaction process. They're targeting high-value properties, knowing the potential payoff is worth the risk.”

In fact, the targets on their deals are increasing. Rachel noted “a 30% increase” in reported cases of seller impersonation last year from across her team.

“It's no longer a rare occurrence but a significant threat we all need to be aware of,” she explains. She mentioned that fraudsters are also leveraging the COVID-19 pandemic, exploiting the shift to virtual transactions where verifying identities can be more challenging.

Tom shared, "We've been tracking these trends closely, and it's clear that no one is immune. Whether you're dealing with residential or commercial properties, the threat is real and growing.”

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Watch: a chilling seller impersonation case

Tom detailed a case study of a recent seller impersonation attempt. This chilling story detailed a fraudster's near-success, infiltrating email exchanges and almost dodging detection until a crucial last-minute call exposed them.

Tom added, "This case highlights the importance of multi-factor verification. If you're relying solely on email for critical communications, you're putting your transactions at risk.”

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Be cautious and consider video calls to confirm identities

While verification during the transactions has always been important, it’s becoming critical with the jump in seller impersonation fraud attempts.

"Always verify the identity of the seller through multiple channels. Don't rely on email alone,” explains Tom. Cross-referencing information through phone calls, video meetings, and physical document checks can thwart impersonation attempts.

For Rachel, the transaction always begins with a video. Her recommendation: "Start with a video call where you can see the seller and verify their ID in real time. Follow up with a phone call using a number you’ve independently verified, not one provided in an email.” She also suggested using secure portals for document sharing and avoiding public Wi-Fi when handling sensitive information.

And every bit of caution helps. Tom noted, "Even simple steps like checking the metadata on emails and documents for inconsistencies can provide early warning signs of tampering.”

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Know the red flags and fraud signals

Identifying red flags early can also save transactions. Rachel pointed out, "Unusual urgency in closing the deal, discrepancies in documents, and communication only through email are major red flags.”

She elaborated, "Fraudsters often create a sense of urgency to rush the process. If a seller is pushing to close unusually fast, take a step back and verify everything twice.” Other red flags include inconsistencies in the seller's story, reluctance to provide identification, and changes in communication patterns.

Tom added, "If something feels off, trust your instincts. It's better to delay the transaction and confirm all details than to proceed and risk falling victim to fraud.”

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Use technology as an extra layer of protection

Leveraging technology is vital. Using advanced tools can provide an extra layer of security.

Rachel explained, "Technology like CertifID not only verifies identities but also tracks and logs all interactions, providing an audit trail that can be invaluable in preventing and investigating fraud.”

It’s all about forcing the transaction to slow down and giving you the time to reduce your surface area of risk. As Tom explained, "Integrating these technologies into your workflow can make a significant difference. It's about creating multiple barriers that make it harder for fraudsters to succeed.”

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Stay vigilant and educated

In the end, the best thing you can do, Tom explained, is to stay informed. 

"Stay educated and updated on the latest fraud tactics,” he said, “Regular training for your team is essential.” Continuous learning is a key defense against evolving threats.

Rachel agreed, "The tactics used by fraudsters are constantly changing. Regular training sessions, webinars, and staying informed about the latest scams can keep you one step ahead.” She suggested creating a culture of security awareness where every team member knows their role in preventing fraud.

And while seller impersonation is a significant risk, with vigilance, robust verification processes, and the right technology, you can protect your transactions. Stay informed, stay alert, and always verify.

For more insights and tools to combat real estate fraud, speak with our team at CertifID.