Seller Impersonation Fraud Attempts Increase, Study Shows

SELLER IMPERSONATION FRAUD Attempts Increase, Study Shows  Seller impersonation fraud attempts continue to increase as 28% of title companies experienced at least one of these incidents in 2023, according to a study conducted by ndp | analytics. The study, which included responses from 783 title companies across the United States, also showed that two out of 10 title companies experienced a seller impersonation fraud attempt in April 2024. While threats increase, the study found 91% of title companies currently provide or plan to provide education and resources to train employees on fraud. These actions are critical to combatting all types of fraud, including seller impersonation fraud, wire fraud and elder financial exploitation.  Importantly, seller impersonation fraud often is caught before the real estate closing is completed. The study showed that in 2023, 46% of companies said identifying and preventing fraudulent transactions before closing was at least somewhat common. To compare, only 26% of companies reported it was somewhat common to catch the fraud after closing.  Both the ALTA Owner's Policy and ATLA Homeowner's Policy cover buyers who fall victim to pre-purchase forgery. The ALTA Homeowner's Policy also protects against a third party who fraudulently transfers the owner's property in the future. For companies in the 46 states where regulators have approved these enhanced policies, 42% of customers, on average, chose policies that protect their property from forgery, including seller impersonation fraud, in the future. In 2023, 16% of title companies paid claims on transactions involving seller impersonation fraud. Common Characteristics and Red Flags that signal heightened risk of  Seller Impersonation Fraud in 2023:  The study also found that it is more common to catch fraudsters pre-closing (46%). Given this consideration, our company has implemented a verification process to reinforce the property owner's identity. For certain transactions where the property is vacant or non-owner occupied, our verification process allows us to verify the identification of a principal to the real estate transaction as soon as the order is opened with us. Once the principal has received the request, they will be guided through the steps, reaffirming our commitment to preventing fraud. Fraud is constantly evolving, and while spontaneous changes to the real estate transfer system are not practical or sustainable, we can all take steps to help combat these crimes without unintentionally harming innocent American property holders. Always choose a Title Company that is at the forefront with training and technology. Disclaimer: Chicago Title will defend Your Title in any legal action only as to that part of the action which is based on the Covered Risk and which is not excepted or excluded from coverage in this Policy. We will pay the costs, attorneys' fees, and expenses we incur in that defense. We will not pay for any part of the legal action which is not based on a Covered Risk or which is excepted or excluded from coverage in our Homeowners Policy. ©2024 Chicago Title Company. Source: ALTA.org

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