Alerts: Scams, Risk Management & More

In today’s real estate landscape, staying informed isn’t just smart – it is essential. The California Desert Association of REALTORS® aims to keep you in the know, and this page will become your go-to resource for the latest scam alerts, industry risks, and important updates that could impact your transactions, your clients, and your professional reputation. Whether it’s new phishing attempts targeting REALTORS®, legal updates from the association, or emerging threats in the field, we’re here to help you stay one step ahead.

We encourage you to check back regularly for timely information, prevention tips, and best practices. As your association, our priority is to support your success while helping safeguard your business and the trust you’ve built with your clients.

Cybercrime & Wire Fraud

Cybercrime – particularly wire fraud – continues to be a top concern in the real estate industry. The U.S. Secret Service has informed the National Association of REALTORS® about a new cryptocurrency scam targeting real estate professionals, some of whom have lost a significant amount of money. In the scam, fraudsters pretend to be wealthy all-cash homebuyers and engage a real estate agent to develop a relationship. Through the course of the engagement, the fraudster lies about becoming rich through cryptocurrency and then invites the agent to check out a crypto investment website that looks legitimate with cryptocurrency that seems real. This is a variation of a “pig butchering” scam where the victim is “fattened up” before taking the bait. The real estate agent makes a small investment, sees a large return, and is allowed to withdraw their profit. The agent then invests more money—even their retirement savings—only to lose it all.

Other forms of cybercrime remain unabated. For 2024, the FBI Internet Crime Complaint Center (IC3) reported potential losses exceeding $16.6 billion, up 33 percent over 2023. The top scams facing consumers and business in the real estate industry are:

  1. Phishing/Vishing/Smishing/Pharming whereby fraudsters use unsolicited emails, text messages and phone calls from a purportedly legitimate company to obtain personal, financial and login credentials;
  2. Wire Fraud is carried out by fraudsters compromising email accounts to effectuate fraudulent fund transfers; and
  3. Personal data breach whereby cybercriminals view, copy, steal or transmit an individual’s personal or sensitive, protected, or confidential data.

Real estate professionals should be aware of the risks facing not only their businesses, but also consumers, and educate staff and clients about preventative steps they can take to prevent falling victim to cybercrime.

In addition, it’s important to report any suspected or actual cyber fraud incident at IC3.gov within 72 hours to have the highest chance of recovery. Last year, IC3’s Recovery Asset Team recouped nearly all of a homebuyer’s $956,342 in closing funds, which they wired after receiving a spoofed email from their supposed real estate agent.

Tips with Cryptocurrency Scams

  1. Never respond to unsolicited texts, social media messages, or emails soliciting an investment.
  2. Be cautious when sharing personal information online, as scammers will exploit personal details to build trust.
  3. Recognize the red flags: rapidly developing a relationship, making an impression of wealth and investment knowledge, promising fast and high returns, creating urgency to make a quick decision, and declining in-person
    interactions.
  4. Thoroughly research any investment platform, including online corporate records and registration with regulatory bodies such as the Securities and Exchange Commission.
  5. Immediately report suspected cryptocurrency fraud by reporting it to www.ic3.gov, and local law enforcement.

Risk Reduction Tips

  1. Train staff to be suspicious before clicking on unknown links or attachments.
  2. Routinely patch and update business software and equipment.
  3. Distribute information to consumers, remind consumers throughout the transaction about the threat of wire fraud, and always verify any wire or payment instructions with a known contact before sending any money.
  4. Use strong passwords and avoid using the same password for multiple accounts
  5. Use multifactor authentication whenever available.
  6. Backup data and files regularly, using the 3-2-1 backup strategy; 3 copies of the data in 2 different formats with 1 copy stored off-site.
  7. Require vendors to adhere to good cybersecurity practices, and obtain assurances in contracts.
  8. Immediately report any suspected cybercrime incident by filing a report at www.ic3.gov, to the local FBI office, and local law enforcement.

Deed Fraud

Deed fraud encompasses a range of crimes where the criminal seeks financial gain through a scheme involving real property. One such scheme is seller impersonation fraud, which is on the rise. According to the American Land Title Association, in April 2024 alone, two in 10 title companies experienced seller impersonation fraud attempts. Most recently, the FBI has warned about an increase in quit claim deed fraud, where criminals forge documents to record a fake transfer of ownership. And, in an informal survey conducted by NAR, 63 percent of respondents were aware of deed fraud in their market within the last year.

Scammers posing as property owners target lien-free vacant land and unoccupied properties, tricking a real estate professional into listing the property for sale. In a “too good to be true” scenario, the seller asks to list below market value and wants a quick sale, preferably for cash. Communication is by text or email and the seller wants a remote closing, as they’re out of state or the country. These scams defraud innocent buyers and can result in liability for unwary agents. State regulators may take action against a licensee for negligence in failing to exercise due diligence to verify the seller’s identity and ownership interest.

Real estate professionals should stay informed about these evolving threats to property ownership, and help educate consumers to stay alert.

Risk Reduction Tips

  1. Look out for red flags when approached to list a vacant parcel or unoccupied property, such as insisting on a quick sale and all-cash buyers, accepting less than market value, and refusing to meeting in person or by videoconference.
  2. Exercise due diligence to verify the purported seller is the actual property owner, which may include requesting a face-to-face meeting, asking for specific details about the property, and sending a certified letter to the owner’s address of record on file with the county recorder.
  3. Conduct independent research to confirm the property owner, such as looking online for a recent photo or speaking to a neighbor
  4. Make sure you or the title company select the remote notary at closing.
  5. Report a suspected vacant land scam to local law enforcement and file a complaint at IC3.gov.
  6. Remove the listing from the MLS and take down any advertisements quickly.