Real Estate Fraud Part 3: Seller Impersonation Fraud – Owner Beware
Parts 1 and 2 of this series described seller impersonation fraud and provided tips for identifying and preventing this kind of fraud. Seller impersonation fraud is just one type of real estate fraud that contributed to the 9,359 cases of real estate fraud reported to the Federal Bureau of Investigation in 2024 resulting in a loss of $173,586,820. This series of articles will identify some of the most common types of fraud in real estate transactions so that both buyers and sellers of real estate can be aware of the potential danger.
How does a criminal find an opportunity to convince an unwitting buyer that they are the owner of real estate that they do not own? Usually, this involves the criminal finding a vulnerable owner. Most typically, the vulnerable owner is an absentee owner. The true owner may be absent due to a military deployment or due to a work assignment that takes them overseas or even across the country for an extended period of time. The true owner may be absent due to an extended stay in a health care facility or admission to a nursing home. And, crazy as it may seem, some bold criminals take the opportunity to impersonate an owner when the person is simply on a long vacation.
Other types of vulnerable owners can be owners of vacant land. When vacant land is owned, owners often do not keep a close eye on the property and would not be alerted to unusual activity occurring on the property. Owners of investment property can also be vulnerable to real estate fraud. Often investment property owners live out of town or are not frequently present on the property, particularly if maintenance and other day-to-day real estate issues are dealt with by the tenant.
One way that property owners can protect themselves is by signing up for free alerts at propertyfraudalert.com. This service, available in multiple states, including Indiana, Illinois and Kentucky, will notify registered users by email if a document is recorded that matches the name registered in the system. While the notification does not prevent the fraud, the notification can alert an owner of potential fraud and the victimized owner can steps to resolve the matter, either with law enforcement or through civil remedies.
Future articles in this series will discuss another type of real estate fraud – wire fraud.