Stopping fraud in its tracks: A wake-up call for agents



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Every agent and brokerage nationwide needs to strengthen their defenses against fraudulent transactions, new Inman contributor Michelle Dubé writes. Enhance the scrutiny in your processes, familiarize yourself with potential warning signs, and tap into available support.

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Recently, my real estate team and I faced a potential fraud attempt when we received a lead from an online aggregator service. The individual claiming to be the “seller” expressed interest in listing vacant land, and after a phone call, we remotely signed a listing agreement and posted the property to the MLS on a Friday. 

However, once the listing went live, the agent who had represented the current owners saw the listing and questioned the sudden reappearance of the property on the market. After double-checking the supposed seller’s (our client’s) official identification, we discovered a well-crafted fake ID with fictional contact information. We terminated the listing immediately. 

Shifting relationships

In an industry that has quickly shifted from in-person to virtual relationships — often with transactions being fully conducted without ever meeting face-to-face — we real estate professionals are faced with a serious challenge in spotting fraudulent transactions before they close. 

Fortunately, we discovered this fraud attempt in time to prevent a major loss. However, my story is just one example of a much larger trend that is plaguing our industry nationwide.

With 54 percent of real estate agents encountering at least one seller impersonation attempt in just the past six months, we, as an industry, must take action to protect our clients, our brokerages and our colleagues from similar attacks.

Spotting the red flags 

The key question now is: What are the red flags that we need to be on the lookout for, and how do we prevent future fraudulent transactions from occurring?

Below are some steps that I recommend considering before working with new clients, whether sellers or buyers:

  • Know who your clients are. Institute standard procedures to require an official ID and a virtual or in-person, face-to-face meeting before listing any property. 
  •  Confirm ownership of listings before signing listing agreements, especially vacant land.
  • Be wary of listings that appear to be significantly under-priced or clients who are in an extreme rush to close a transaction when working with buyers,
  • Be on the lookout for suspicious payments, especially high-value wire transfers. Be cautious of suspicious emails from unknown sources or compromised contacts. Instruct clients to verify wire transfer details both in writing and verbally. Scrutinize last-minute payment instruction updates before completing transactions.
  • Codify the steps that work for you based on local laws and market conditions, closing potential loopholes. Utilize title agency partners with robust identity and ownership verification tools.

Protecting our reputation, both as individual agents and as an industry, is key to our longevity and success. Part of that is safeguarding our clients from these attacks and giving them the tools they need to protect themselves.

As we journey into 2024, we urge every agent and brokerage nationwide to strengthen their defenses and demonstrate our value to clients. Enhance the scrutiny in your processes, familiarize yourself with potential warning signs, and tap into available support, particularly from your title agency partners who stand prepared to collaborate in this ongoing battle.

Our ability to protect our clients is the key to our future success. 

Michelle Dubé joined The Zoeller Group in 2018 with a passion for helping both consumers and agents realize their real estate goals. Connect with Michelle on Facebook.





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