The line from “The Godfather” rings true in the age of digital fraud and stolen identities: It’s not personal; it’s strictly business.
A guiding principle of business is diversification. The more diversified one is, the more likely one will see a return on investment. Fraud is a business, and the criminals seek ROI.
“We’re not talking about knuckleheads doing this,” Intellicheck CEO Bryan Lewis told Karen Webster in an interview. “We’re talking about folks who are sophisticated criminals. And there are plenty of places that they can go.”
The sheer volume of data out there, the hacked credentials, the Social Security numbers and the fake IDs are fodder for scammers to pose as someone else in a bid to commit fraud. The Identity Theft Resource Center estimated that there were about 1.1 billion data breach victims in the first half of 2024, an increase of 490% compared to the first half of 2023.
It’s no surprise, then, that fraud is creeping into all transactions, spanning retail, healthcare and real estate. Real estate fraud involves using fake information, including credentials, documents and synthetic IDs, to mislead property buyers, sellers, lenders or title insurers for financial gain.
The FBI estimated that real estate losses reached more than $390 million in 2022.
Fraudsters are adept at exploiting digital vulnerabilities, so the number may be understated, Lewis said. One title insurance firm that works with Intellicheck, Doma, estimated that the average loss on a per-transaction basis exceeded $500,000.
Don’t expect a respite anytime soon, even as the economy remains resilient and interest rates come down, Lewis said. Fraudsters take no breaks, so fraud rates and attempts will go up, and criminals will keep going after industries such as real estate that are still using old-school knowledge-based authentication.
Real estate fraud can be most jarring with title fraud because would-be customers don’t realize they don’t own the land or the property they’ve bought until after the fact, sometimes after the moving truck pulls up, Lewis said. Fraudsters go where the markets are hot, particularly Texas, California or Florida. They target vacation markets where people don’t live year-round or empty lots, so it’s easier to take advantage of locations that are occupied only some of the time. They target the elderly and non-residents, and they set sights on properties where turnover is high. Vrbo, Zillow and other real estate websites offer a broad swath for swindling.
As far as defense, Intellicheck’s mainstay in identity verification lies with verifying the authenticity of government-issued IDs, such as driver’s licenses. The plastic, government-issued identifiers are still part and parcel of everyday transactions, from checking into a hotel to buying a house.
The verification is critical for title insurance firms and real estate agents because no one’s familiar with all states’ licenses and how they are supposed to look, he said.
Four of the top five title companies in the United States use Intellicheck to verify IDs, and the company’s technology stops thousands of would-be fraud attempts every day, Lewis said.
Looking over the long term, he said his firm is in discussions with its customers about how data can be shared more widely so that companies and consumers can be aware that someone has tried to use their credentials for malfeasance, particularly as lower interest rates spur more real estate transactions.
“If you are not using sophisticated tools to see if the plastic is real, you are going to get stuck,” Lewis told Webster.
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