Contact:
Liz Martins, Nevada Division of Insurance, Public Information Officer
E-mail:
emartins@doi.nv.gov
Contact:
Teri Williams, Department of Business & Industry, Public Information
Officer
E-mail:
twilliams@business.nv.gov
FOR
IMMEDIATE RELEASE – August 31, 2023
CONSUMER ALERT: Real Estate Identity
Theft and Fraud on the Rise
What property owners, homebuyers and
industry professionals need to know to avoid becoming a victim
CARSON CITY, NV – The
Nevada Division of Insurance and the Nevada Real Estate Division want to bring
public awareness and education to an increasingly prevalent real estate
identity theft scam. Known as “vacant lot fraud” or “seller impersonation fraud”,
bad actors impersonate the owners of a property or vacant lot and attempt to
sell it for their own profit.
Unsuspecting owners,
eager buyers and even licensed real estate and insurance professionals guiding
the transactions can all unknowingly end up as victims in these elaborate
identity theft schemes. The best way to protect yourself from this rising
threat is to understand how the scam works, know the red flags to look out for,
and the precautions you can take to prevent this scam from happening to you or
your clients.
How the scam works
Scammers search
public records to identify owners of real estate that is free of a mortgage or other
liens, most often targeting vacant lots and investment, vacation or rental
properties that are non-owner occupied. The scammer then poses as the owner and
contacts a real estate agent to list the property for sale. Once an offer is
made, the scammer quickly accepts it, then sends falsified documents to the
title firm or closing attorney. The closing proceeds are then transferred to
the scammer leaving the fraud typically undiscovered until transferring
documents are recorded with the applicable county.
Watch out for red
flags
According to the
American Land Title Association (ALTA), homebuyers and licensed professionals alike
should consider conducting additional due diligence or halt a transaction if
they see these potentially suspicious seller behaviors:
- Seller is difficult to reach via phone or refuses
to meet via video call; only communicates via text or email
- Seller sets listing price lower than the current
market value and wants a fast cash sale with little or no fee negotiation
- Seller refuses to attend signings; always claiming
to be out of town
- Seller requests to use their own notary
- Seller demands proceeds be wired
- Seller has a different address than the owner’s
address or tax mailing address
- Seller refuses or is unable to complete
multifactor authentication of identity verification
Precautions you can
take
ALTA advises title
and real estate professionals to take the following precautions during the
transaction to help thwart scammer’s attempts early on:
- Contact the seller directly at an independently
discovered and validated phone number
- Send mail to the seller at the address listed on
tax and property records
- Ask the seller’s real estate agent if they have
personal or verified knowledge of the seller’s identity
- If using a remote notary, be sure the notary is fully
vetted and approved by your state; otherwise, the title company should arrange
for an in-person notary signing at an attorney’s office, title agency, or bank.
- Verify the seller’s identify by sending the
seller a link to complete a third-party identity verification
- Run the seller’s email and phone number through a
verification program
- Ask conversational questions to ascertain
seller’s knowledge of property information not readily available in public
records
- Compare the seller’s signature to previously
recorded public documents
- Use a wire verification service or confirm wire
instructions match account details on seller’s disbursement authorization form
- Require a copy of a voided check with a
disbursement authorization form
- Require that a check be sent for seller proceeds
rather than a wire
Additionally,
property monitoring services are offered by most county recorder’s offices to
help alert owners to any activity or attempted transactions involving their
property. Prospective buyers can also purchase the American Land Title
Association Homeowner’s Policy of Title Insurance for additional fraud
protection. If you are ever in doubt, have questions, or something does not
feel right during a real estate transaction, always speak directly with your
real estate agent/broker or your title insurance agent.
Report fraudulent
activity immediately!
It is crucial to
remain vigilant and report any suspicious or fraudulent activity immediately.
Fraud reports can be filed at any of the following entities:
For additional information, please refer to the list of resources below:
Nevada Division of InsuranceEmail questions about suspected fraud to:
insurance.fraud@doi.nv.gov
Information on Title Insurance
Nevada
Real Estate Division
American
Land Title Association
Better Business Bureau
About
the Nevada Division of Insurance
The mission of the
Nevada Division of Insurance is to protect the rights of Nevada consumers
in their experiences with the insurance industry and to ensure the
financial solvency of insurers. For more information about the Division
of Insurance, visit DOI.NV.GOV or follow the Division on Twitter, Facebook, LinkedIn, or Instagram.
About
the Nevada Real Estate Division
The mission of the Nevada Real Estate Division is to protect
the public and Nevada's real estate sectors by fairly and effectively
regulating real estate professionals through licensure, registration,
education, and enforcement. For more information
about the Nevada Real
Estate Division, visit RED.NV.GOV.
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