This line from “The Godfather” rings true in an age of digital fraud and identity theft. It’s not personal. It’s strictly business.
The basic principle of business is diversification. The more variance you have, the higher your return on investment. Fraud is a business, and criminals seek ROI.
“We’re not talking about knuckleheads doing this,” Intellicheck CEO Brian Lewis told Karen Webster in an interview. “We’re talking about sophisticated criminals, and there are a lot of places they can go.”
The sheer amount of data out there, hacked credentials, Social Security numbers, and fake IDs give scammers the tools to impersonate others and commit fraud. The Identity Theft Resource Center estimates that approximately 1.1 billion people were victims of data breaches in the first half of 2024, an increase of 490% compared to the first half of 2023.
It’s no surprise, then, that fraud has crept into every transaction, from retail to healthcare to real estate. Real estate fraud involves the use of false information, such as credentials, documents, or synthetic identities, to deceive real estate buyers, sellers, lenders, and title insurance companies for financial gain.
The FBI estimated that real estate losses will reach more than $390 million in 2022.
That number may be an underestimate because fraudsters are adept at exploiting digital vulnerabilities, Lewis said. Doma, one of the title insurance companies that works with Intellicheck, estimates that the average loss per transaction is more than $500,000.
Don’t expect respite anytime soon, Lewis said, even if the economy remains resilient and interest rates are falling. Fraudsters never rest, so fraud incidence and attempted rates will rise, and criminals will continue to target industries like real estate that still use old-fashioned knowledge-based authentication.
Where are the vulnerabilities and defenses?
The most troublesome type of real estate fraud is title fraud. That’s because potential customers don’t realize they don’t own the land or property they bought until after the fact, in some cases, until the moving truck arrives, Lewis said. Scammers go where markets are active, especially Texas, California, and Florida. They target vacation markets and vacant lots that are uninhabited all year round, so it’s easier to take advantage of places that are only temporarily occupied. The targets are elderly people and non-residents, and the company is targeting properties with high turnover rates. Scams are widespread on Vrbo, Zillow, and other real estate websites.
On the defensive side, Intellicheck’s identity verification focus is on verifying the authenticity of government-issued IDs such as driver’s licenses. Government-issued plastic identifiers are still part of everyday transactions, from checking in to a hotel to buying a home.
He said verification is very important for title insurance companies and real estate agents because no one knows every state’s licenses and what their licenses look like.
Four of the top five title companies in the United States use Intellicheck for identity verification, and the company’s technology prevents thousands of fraudulent attempts every day, Lewis said.
Over the long term, he said, especially as interest rates continue to decline, he hopes businesses and consumers will be able to be aware of fraudulent attempts to use their credentials. It said it is talking with customers about how to share data more widely. real estate transactions.
“If you don’t use sophisticated tools to check if the plastic is real, you’re stuck,” Lewis told Webster.
See more: Verification, Brian Lewis, Featured News, Scams, Identity Theft, Intellicheck, News, PYMNTS News, PYMNTS TV, Real Estate, Real Estate Fraud, Security, Video
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