Report: Consumers Lose $106K on Average to Wire Fraud
April 18, 2023
Consumer real estate payments represent the most frequent target of wire fraud in 2022, with cybercriminals targeting buyer cash-to-close payments in particular, according to a report from CertifID.
Following an increase in virtual closings during the COVID-19 pandemic, and a peak in U.S. home sales and median home prices in 2021 and 2022 respectively, cybercriminals have increasingly sought to exploit real estate payments. Not only has the volume and value of real estate transactions increased, creating more opportunities for fraud, but the criminals themselves have become progressively more sophisticated and global in nature, making apprehension difficult. The real estate sector filed $893 million in losses during 2020-2021, according to the Financial Crimes Enforcement Network (FinCEN).
CertifID’s findings indicate that the success rates in recovering fraudulent wire transactions for homebuyers and sellers were one-third that of real estate firms, likely because consumers are typically unable to recognize fraud early enough or know what steps to take in recovery.
Consumer impact findings from the report based on CertifID’s Fraud Recovery Services (FRS) division include
- 74% of wire fraud recovery requests came from consumers in 2022
- $106,557 was the average wire fraud loss for consumer recovery cases in 2022
- Of the recovery requests for wire fraud in 2022, 41% were buyer cash-to-close transactions, 24% were mortgage payoffs, and 11% were seller net proceeds
- Wire fraud recovery success rates for consumers were one-third that of real estate firms
“Real estate transactions represent some of the largest transactions a consumer will ever make, so losses due to fraud can be devastating,” said Tyler Adams, co-founder and CEO of CertifID. “Consumers need to understand the importance of protecting their transactions; they need to be more aware and educated on how to recognize fraud; and they need to know what immediate next steps to take if disaster strikes and recovery is necessary.”
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