Real estate fraud prevention has always been a hot topic for the industry. It has only grown worse in recent years, especially during 2020 when the COVID-19 pandemic opened new opportunities for fraud. Now, in many areas where the housing market is seeing a huge increase in activity, hackers and cyber criminals are doing their best to take full advantage of unsuspecting buyers, sellers, and real estate professionals.
Experts predict a large rise in real estate fraud this year. The real estate industry is a favorite target of scammers because of the large dollar value represented in home and property sales. The amount of personal information and financial information exchanged via email by real estate professionals and their clients attracts plenty of attention from hackers attempting fraudulent activity.
The National Association of Realtors (NAR) recommends that all agencies adopt real estate fraud prevention techniques and strategies to better discover and reduce the risk of various types of real estate fraud. While some of the newer real estate fraud prevention trends in 2021 take advantage of our ever-advancing technology, the first step is to develop a fraud policy.
A fraud policy can provide information and guidance to employees that may have been previously unaware of the signs of fraud. While a fraud policy is certainly not a new concept, it is one of the primary real estate fraud prevention trends in 2021 as agencies realize they must be ever more vigilant against scammers and cyber criminals.
A strong fraud policy will contain many components, including how to deter fraud, how to recognize suspicious activity related to fraud, how to spot fraudulent emails, and how to report suspected fraud.
And, as always, agents and other real estate professionals are advised to always check and double-check all information and details in an email or phone call. Scammers have become increasingly sophisticated and adept at imitating other professionals or individuals involved in a real estate transaction. Simple human carelessness is often the culprit that allows fraudulent activity to succeed.
Providing advanced training for staff and also educating clients is another important step to reducing fraud and a real estate fraud prevention trend in 2021. Many agencies have realized that not only are some employees not fully aware of what actions might facilitate or prevent fraud, but clients (buyers and sellers) also need to take precautions to help reduce the risk of fraud.
For example, recognizing phishing emails, updating security, antivirus applications and firewalls, avoiding signing into private accounts on a public Wi-Fi server, and using strong passwords are critical components in preventing fraud. Likewise, clients should be made aware of your fraud prevention policies as well as what tools you will use during the course of the real estate transaction, such as an electronic money transfer system.
Additionally, consider supporting and joining organizations that are actively doing the work to prevent real estate fraud. Education is a vital piece to the puzzle for preventing fraud in real estate and being a part of industry advancement positions you as a thought leader to clients and partners alike.
One of the most prevalent types of real estate fraud is wire fraud, committed when buyers are tricked into sending wire transfers for earnest money deposits and closing costs to a fraudulent account. That’s why one of the most up-and-coming real estate fraud prevention trends in 2021 is the use of an electronic money transfer system for such payments and other transactions.
An electronic money transfer system is much safer than using wire transfers because the money transfer is subject to more scrutiny and security protocols. And, some electronic money transfer systems such as paymints.io also feature bank-level encryption, advanced ID verification, and other security measures to significantly reduce the risk of fraud.
While human error can often be blamed for scammers getting away with their fraudulent activities, sometimes the IT infrastructure is just not secure enough, enabling hackers to easily infiltrate a system. More agencies are partnering with cybersecurity firms and IT service providers to implement cybersecurity measures and ensure maximum protection of the network, servers, and sensitive data.
A cybersecurity firm can provide 24/7 monitoring of your network and devices, helping to detect, prevent, and eliminate cyberthreats.
Cyber criminals, hackers, and scammers will likely continue their attempts at various types of real estate fraud well into the future. Therefore, it is very important that agencies, title companies, and others in the real estate industry always strive to keep data protected by securing information on computers and mobile devices, and practicing common sense cybersecurity procedures. You can easily eliminate one of the major types of real estate fraud, wire fraud, by using an electronic money transfer system such as paymints.io. Not only does it add an extra level of security to your real estate transactions and grant both you and the client’s peace of mind, but it is also easy to use and more convenient than relying on wire transfers and cashier’s checks.
You can discover more important industry-related information and resources by visiting real estate blogs and forums.
Get started using a secure electronic money transfer system for earnest money deposits, closing costs, and other fees. Schedule a free demo of paymints.io today.