Cyberfraud threats are getting more severe. In 2024, the FBI warned of “alarming increases in both the frequency and financial impact of online fraud perpetrated by cybercriminals.”
The real estate sector is certainly not immune to these threats. In fact, bad actors have plenty of reasons to target real estate transactions, which usually involve the movement of large sums of money among multiple parties exchanging sensitive nonpublic information (NPI) via email. And while some fraud can have offline components (like the underreported ‘wire back to buyer’ scheme where a fraudulent buyer tries to get a title & escrow company to send back an ‘overpayment’ on a forged cashier’s check), nearly all wire fraud is inherently a type of cybercrime since funds are wired digitally.
Qualia’s newly published 2025 Special Report: Real Estate Wire Fraud Trends shows that title & escrow professionals consider wire fraud to be the biggest risk to their business. In fact, 95% of the 361 title & escrow professionals whom Qualia surveyed said that the frequency of wire fraud attacks had increased or stayed steady during the previous year, while more than 60% said their company had been targeted by wire fraud in the past 12 months.
Here are seven major findings from the report:
1) Phishing and BEC are the most prevalent risks
Phishing is by far the most common type of cyberattack that title & escrow companies face. Qualia’s survey found that 93% of title & escrow companies experienced a phishing attack in the previous 12 months. Phishing attacks typically involve bad actors posing as trusted individuals—such as colleagues, vendors, customers, or officials—in order to fool their targets into taking a harmful action by making them believe that a message or request is legitimate. Phishing can lead to business email compromise (BEC) attacks, where someone posing as a company employee tries to trick a victim into making an unauthorized wire transfer into a fraudulent bank account.
Title & escrow companies can mitigate the risk of fraud from BEC and phishing attacks by migrating sensitive communications away from email and towards secure portals. Qualia Connect not only provides a secure portal for exchanging sensitive information and documentation, it also automates data flows to eliminate rekeying errors and includes features such as role-based access controls and two-factor authentication to strengthen data security. Discover some additional benefits of secure portals in this Qualia Insight blog post.
2) Big losses on the rise, recovery amounts uncertain
Financial losses due to fraud are getting bigger. Qualia’s survey revealed a 31% increase in the percentage of respondents who reported losses over $50,000 due to wire fraud. And recovering those funds is no simple task. The survey found that only 19% of the title & escrow companies that suffered financial losses were able to recover all of the lost money. Concerningly, more than half of respondents who suffered losses due to fraud in the past five years said they were unsure what percentage of funds they were able to recover.
The financial impacts of wire fraud seem likely to increase in the years ahead. Already, some title & escrow companies have experienced losses of more than $500,000 in a single year. Given the magnitude of the risk, companies need to have a crystal-clear understanding of when fraud occurs, how it happened, how much money the criminals took, and what percentage of those funds the company was able to get back. This is the only way for title & escrow companies to identify potential vulnerabilities, strengthen their defenses, and establish effective processes for minimizing financial risks for their business and their clients. Title & escrow companies should also have processes in place so they can respond immediately in the event of fraud in order to ensure operational continuity, safeguard their reputation, and maximize the chances of recovering some or all of the stolen funds.
3) Manual fraud prevention processes are still widespread
More than three-quarters of title & escrow firms still rely on manual processes, including phone callbacks and scrutiny of consumer records and sellers IDs as their primary means of detecting and stopping fraud. Only 22% of survey respondents reported using digital or automated tools to help detect and prevent fraud.
Yet manual processes that worked well in the past may not always be as effective now or in the future. For example, advanced artificial intelligence (AI) technologies are fueling staggering increases in digital document forgeries and ‘deepfakes’, which scammers deploy in order to bypass identify verification processes and fool biometric checks.
However, even as technology heightens certain risks, it also gives title & escrow professionals powerful tools to unmask fraudsters. For instance, the University of Virginia notes that AI can be trained to detect deepfakes that would otherwise likely fool the human eye.
Qualia offers digital and automated tools to detect and mitigate wire fraud. For example, Qualia Shield uses a multivariable assessment process to calculate fraud risks and performs ID verifications. One way Qualia Shield does this is by asking users to scan their IDs with a mobile phone and then analyzing the barcode to determine if the ID is government-issued. Shield also has the ability to analyze a user’s facial geometry to determine whether it matches their photo ID.
None of this is intended to devalue human expertise. Sometimes, an agent’s years of experience and intuition provide the best defense against wire fraud. When something about a transaction just “feels off” to an agent, the manual method of picking up the phone and calling a trusted number to verify wire instructions can be a very effective way to stop fraud in its tracks. AI can automate processes, but it cannot replicate the instincts of a trained human reviewer. Thus, the best defense against fraud may be a multi-layered defense that combines the distinct advantages and capabilities that humans and machines each bring to the table.
4) Layering up is necessary for protection
Qualia’s survey found that over 90% of title & escrow professionals recognize that protecting the security of all the parties involved in a real estate transaction reduces the risk of wire fraud for everyone. A similar percentage (88%) of respondents agreed that having multiple layers of protection provides peace of mind—both in terms of safeguarding their own business and keeping their clients safe from wire fraud.
Qualia has long recognized that a multilayered approach to cybersecurity can offer value protections from cyberattacks and help title & escrow companies harden their defenses against wire fraud. Learn more in this cybersecurity webinar on how effective cybersecurity strategies integrate people, processes, and technology.
5) Empty lot scams are full of danger
Some bad actors engage in seller impersonation fraud by pretending they have the right to sell a property in order to deceive buyers, real estate professionals, or banks. One type of seller impersonation fraud involves empty lot scams where the fraudster claims to own vacant land. Qualia survey data shows that two-thirds (66%) of title & escrow professionals experienced empty lot scams in 2024. That’s a noticeable increase from the 58% who said they were targeted by those types of scams in 2023.
The identity verification features in Qualia Shield can help title & escrow professionals bolster their defenses against title & escrow fraud.
6) Growing concerns over how vendors handle NPI
Comparing data from this year’s survey with Qualia’s previous research into the top concerns of title & escrow professionals, one data point stood out starkly. In 2024, survey respondents reported more concerns over whether their third-party vendors are leaving customers’ nonpublic personal information (NPI) exposed to threats from cybercriminals.
The American Land Title Association (ALTA) publishes a list of Best Practices for safeguarding NPI. Title & escrow professionals can assess whether their business partners adhere to these best practice guidelines by confirming that vendors hold ISO 27001 certifications and reviewing their SSAE 18 SOC 2 reports. Get more details about the similarities and differences between the ISO and SSAE standards in this Qualia Insight blog post.
7) Threats are constantly evolving, but training is too often episodic
Cybercriminals are constantly looking for ways to exploit technological developments to bypass defenses and hack into vulnerable systems. So, it’s concerning that significant percentages of title & escrow companies report that they only train employees on wire fraud prevention occasionally—for instance on an annual basis or even just during the new hire onboarding process.
In Qualia’s experience, leading title & escrow companies build a culture of continuous learning and offer training on new threat vectors on a monthly or even a weekly basis. These frequent training sessions can help ensure that employees are equipped with the knowledge and tools to ward off the latest types of fraud attempts and protect the company from cybercriminals.
Dive into the data to get the full picture of the wire fraud threats facing the real estate sector today and see how title & escrow firms are rising to the challenge in this Qualia Special Report.
