Early this year, TLTA formed a Seller Impersonation Fraud Task Force. Our two-fold focus was to provide tools for TLTA members to help them avoid becoming a victim of this fraud and secondly, to find as many ways possible to interact with Texas Realtors so that both Associations could work as a team to stop this Fraud. Realtors, Brokers, MLSes, Realtor Associations, Real Estate FSBO Portals (such as Zillow), Title Associations, and Underwriters need to all adopt new strategies, processes and technologies to stop taking listings from Fake Sellers, stop writing contracts on FSBOS involving Fake Sellers and no listing agent, stop processing Fraudulent Contracts as soon as they are submitted to the title company and stop closing transactions involving Seller Impersonators.
To date the Task force has:
1) Hosted the Seller Impersonation Fraud Panel Discussion during the Opening Session of the 2023 TLTA conference educating everyone on this fraud and how to avoid it. After the session, TLTA emailed links to the two flyers. One flyer is focused on what Title Agents need to implement to avoid Seller Impersonation Fraud and the other flyer is geared towards educating real estate agents and is co-branded by TLTA and Texas Realtors. Texas Realtors and TLTA have jointly produced materials and educational webinars for their members. On the advice of the Secret Service, we are encouraging everyone to avoid posting collateral on the internet and thereby further educating the fraudsters. Instead, the flyers should be emailed directly to the respective memberships, handed out and discussed at sales meetings or presented to members only webinars. Flyers attached.
2) TLTA members are working with their employees, sales teams and management teams to conduct webinars with their respective Realtor customers using the attached co-branded flyer. The more we can educate agents to avoid taking listings from fraudsters and do more to validate the identity of sellers during the listing process the more we will see this fraud decline. Selling agents representing buyers need to also implement processes that avoid entering into FSBO contracts that were listed by Seller Impersonators. Zillow FSBO site is a common source of Fraudulent Listings.
3) One of the Task Force attorney members was interviewed for an article on Seller Impersonation Fraud that was published in the Texas Realtors Magazine.
4) The TLTA task force and Texas Realtors will host a state-wide webinar in early August for Texas Realtor members.
5) The July issue of Texas Realtors ran an article about Seller Impersonation Fraud. The topic is featured on the cover! The article is based on an interview with Leslie Johnson, Task Force member and underwriter with WFG and appears as a link on their website: Seller Impersonation Fraud – Texas REALTORS® (texasrealestate.com); as a Digital Magazine: Texas Realtor : July 2023 (mydigitalpublication.com) and as a downloadable PDF: TexasRealtor0723.pdf (texasrealestate.com). The same issue also has an article on "Understanding Title Insurance" based on an interview with attorney Dawn Enoch Moore. Dawn does a great job explaining how Title Insurance works and eliminates risk for the buyer and lender (and seller). That article also has a sidebar about Seller Impersonation Fraud giving another exposure to what agents need to understand about this fraud.
6) Texas Realtors also ran a non-bylined piece on June 28th titled "Seller Impersonation Fraud: Red Flags and Best Practices. Seller Impersonation Fraud: Red Flags and Best Practices – Texas REALTORS® (texasrealestate.com). Here are some of the comments from readers:
- "Thank you, Texas Realtors for providing this timely article. Because I have had several of my agents having to deal with these scammers on multiple occasions, I know it is very prevalent. These guidelines are excellent suggestions to follow. The best prevention is the intuition of an alert agent."
- "...I'd further add that maybe if we all slowed down some, we could still do a great job, and possibly even do it better than the instant-immediate group that wants to be the fastest and first to the finish line. My experience has been that most legit clients, buyers or sellers, are seldom really looking for speed at the expense of quality work. If need be, explain to them the difference. It's part of your value added."
- "Great information. We were victims of such a scam. Very disappointed that the listing agent did not use the recommended information as our land was 2 weeks from closing. I caught the fraud by randomly checking the current listing in my area. I called the selling agent who insisted we listed with him. He did not confirm or ask for the fraudulent seller's ID. The buyer's agent was also upset. Very upsetting all around."
The Task Force continues to brainstorm how we can be a catalyst for change within our title industry, the Realtor/Broker Community and the Mortgage Industry to help stop this widespread and, unfortunately, rapidly growing fraud. I think the best analogy is that this is an arms race. These frauds are perpetrated by some type of organized criminal effort. They are using our industry's long-held commitment to being service oriented and accommodating against us. They are finding the weaknesses in our processes and exploiting them. They are constantly sharing sources of information on properties and people to refine their scams and fraud schemes. They are finding better ways to forge IDs and documents that defeat our best practices. The clear message from the Secret Service and other Law Enforcement branches is that this fraud is not going away. It will take a focused effort by everyone involved in the real estate transaction to beat them back with better tools, better systems, better education and better execution.
Post Script: We have purposely used the language "Seller Impersonation Fraud" or even "Fake Sellers" instead of Deed Fraud or Vacant Land Fraud. This is really an Identity Theft type of fraud and it is being used on more than vacant land. It includes properties with structures such as rent houses, short-term rentals, Vacation homes, etc. Anything that involves an absentee owner or non-owner-occupied property. Forged deed fraud still exits but the big increase in fraud does not usually involve a forged deed.
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David Tandy
CEO
Texas National Title, Inc.
Austin TX
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Original Message:
Sent: 07-14-2023 10:00
From: Kelly Romeo
Subject: Seller and Vacant Property Fraud
The ALTA Information Security Work Group met recently and discussed ways to detect and deter seller fraud and vacant property fraud.
Work Group members Jon Biggs (Investors Title) and Bruce Phillips (WFG) shared the attached resources.
We are interested in hearing about more protocols and policies you've put in place to address this emerging fraud challenge. What is your company doing?
#ALTACyber
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Kelly Romeo | SVP & CIO | ALTA
202-261-2948 | kelly@alta.org
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