When you’re a real estate agent, it’s natural to have your name, face and contact details widely publicized to attract business. However, having your details available in the public domain can leave you vulnerable to identity fraud.
Identity fraud (or identity theft) occurs when someone assumes your identity using your personal details with the purpose of obtaining financial gains. This, sadly, can result in your bank account being drained, your credit card being maxed or new accounts being opened in your name without your consent. It can also be bad news for your business. Identity fraud can not only wreak havoc on your credit rating, but it can also cause long-term damage to your reputation as a real estate agent.
Common Identity Fraud Situations in Real Estate
Scammers will impersonate real estate agents and trick buyers into paying large sums of money (often “deposits”) via direct transfer. Typically, the criminals track what you’re currently selling and find out who your buyer is, usually by hacking your emails or simply tracking your business locally. Then, they send an email to your buyer, requesting a sizable deposit to hold the property. This email may even be sent to people you are totally unaware of. Once the scammers have been paid by a buyer, these fraudsters disappear — leaving you with a damaged reputation and your buyers without a home and out hundreds of thousands of dollars.
Fake Property Listings
Fraudsters may post your listings, name and photograph on different platforms to attract property buyers or use them fraudulently to contact prospects in a more direct manner. Usually they target investors – people who may be interested in purchasing a property on photographs and information alone, without actually physically seeing it. Even worse, your image and name may be attached to a fake listing for a property that isn’t even for sale (without the owner knowing it).
Using Fake Identities to Rack Up Bills
A real estate agent’s information is everywhere — your real estate listings, your social media accounts, and in many cases, hacked emails or servers. It doesn’t take much to create fake identity documents, new bank accounts, or credit cards. Once this happens, the bills can really start racking up. You may be unaware for some time – until you need to apply for a mortgage yourself or buy something on credit.
What can you do to protect your identity?
Be very clear with your clients about your payment process
Often, deposit fraud is successful because clients are unsure about the details of how deposits are supposed to be paid. Be very clear with your clients from the outset to ensure there’s absolutely no confusion about how deposits are to be made for the property. Safeguards might include:
Creating a policy stating you’ll NEVER email a client requesting payment – this way they will know for sure that if a request comes via email, it’s fraud.
Providing the client with a paper copy of any wire instructions in person
Listing bank check as the preferred method of payment.
Whatever the case may be – clarity is key.
Reverse Image Search
Reverse image searches online can lead you to any unauthorized duplicates of your promotional images on the web.
The two main reverse image search engines at the moment are:
Similar to your typical Google search, a reverse image search simply involves uploading your photograph instead of typing keywords. The search engine then finds all of the places where the photograph “lives” on the Internet.
Limit your personal information on social media and keep your servers secure
Be cautious about publicizing your birthday, middle name or other personal details on social media. In isolation, something as simple as a birthday seems minor. But fraudsters can use that along with other information to build a profile of your identity. This can then be used to impersonate you. It’s not just social media you need to watch out for either. “Phishing” schemes are getting more sophisticated as time goes on. Don’t divulge personal data online, over the phone, or via email unless you’re certain whom you’re speaking with.
Keeping your real estate business information and client records secure is critical. Invest in firewalls, anti-virus software and IT staff that know their stuff.
Review your finances regularly
You can be totally unaware that criminals are using your information illegally to purchase goods and services. Be sure to check your financial statements regularly – bank statements, credit card bills, and even your credit report. Frequent checks will ensure you discover anything that looks strange as soon as possible.
Ensure you have adequate insurance
Do you know if your real estate errors and omissions insurance policy will protect you if something does go wrong? What if a client blames you for their loss of money due to a deposit scam? Are you covered if your client sues you because they transferred funds to someone they mistakenly thought was you?
It’s important to be aware of what your insurance policy covers and if there are any exclusions. Every individual CRES real estate errors and omissions insurance policy includes $50,000 in Cyber coverage for client notification costs due to a data/security breach. (And you can increase that coverage as an option.) Company policies can include Cyber coverage as an option.
Your business may also want to consider a separate Cyber Liability policy to add expanded coverage that includes wire fraud.
Be proactive in keeping your identity safe
Check out “Be Alert and Prepared for Broker Identity Theft,” a post we released after one of our E&O clients reported that her identity had been stolen. Someone was using her name, license number and professional background on a fake timeshare website.
What to do if your identity has been stolen?
If you discover you’re the victim of identity fraud in your real estate business, report it to the police. You should also notify the Federal Trade Commission through the “Identity Theft” website: https://www.identitytheft.gov/. Alternatively, you can call them on 1-877-ID-THEFT. If any of your accounts or credit cards have been compromised, you should contact your bank. You can also place a fraud alert on your credit file.
Prevention is better than cure, however. Take steps to protect your personal and business information to prevent fraud in the first place. To find out more about a CRES real estate E&O policy + ClaimPrevent®, contact CRES at 800.880.2747.
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
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