Two chapters of the Better Business Bureau recently appeared on local news stations in northern Alabama and northeast Louisiana to talk about home title theft and title monitoring services. It was obvious that this was a new subject for them, and they got some things right and some things wrong.
The Better Business Bureau (BBB) representatives acknowledged that home title fraud is an issue, and they provided some useful tips to homeowners about how to protect their identities. However, they truly understated the seriousness of the crime, primarily because they have very little experience with deed fraud. Those of us who battle it in court and who know real victims understand that this crime can be devastating to homeowners. Although there are no nationwide statistics about home title fraud, there is a growing body of evidence in various jurisdictions that it is increasing in frequency.
Is title fraud real?
As I’ve said on many previous occasions, I have personally fought home title fraud since 2003 – first as a real estate fraud prosecutor, then as a private attorney, and now as the CEO of a tech company that creates fraud prevention technology. Deed fraud is very real.
And, don’t just take my word for it. In a recent news report, an assistant county prosecutor in Dallas, Texas said that his office had found 90 incidents of deed fraud in the last couple years. According to the New York Times, homeowners in Brooklyn filed 3,000 deed fraud complaints between 2015 and 2019. And, the title insurance industry pay between $200M and $400M in claims based on title fraud every year.
Unfortunately, nobody keeps nationwide statistics on these claims, and hopefully sometime soon the FBI will begin to do so. What this means is that there is no way to know with certainty whether the crime of home title theft is growing in frequency.
However, I have reason to believe the number of cases is about to explode. As a former white collar criminal prosecutor, I still have a lot of friends who are fraud detectives. They tell me that in the Los Angeles area, Russian and Armenian criminal syndicates have discovered home title theft as an easy and extremely lucrative way to make money. You can assume that if these two organized crime groups have begun to use stolen home equity as a source of funds, others have too.
In a previous article, I explained why this crime is so easy.
What the BBB got right.
The most important thing that the BBB representatives got right is that home title theft is a type of identity theft. To commit this crime, a fraudster has to steal the identity of the homeowner and forge that person’s name on a fraudulent deed. They might even steal the notary’s identity and forge the notary’s signature and stamp as well. In order to profit from this incident of identity theft, they either have to take out a mortgage or sell the property to unsuspecting buyers.
The BBB and the news stations also made some good recommendations, including these:
- Be careful with your personal information. Treat your personal information like the valuable commodity it is. Make sure you shred any documents that have your bank account information, Social Security/Social Insurance number, or other personal information. Be suspicious of any unsolicited communication asking for personal information.
- Check your credit reports regularly for unauthorized inquiries and accounts. In the U.S., you have the right to check your credit report with each of the three major credit bureaus once per year at AnnualCreditReport.com. This is the only free crediting reporting service authorized by the Federal Trade Commission. Space these checks out across the year, and you will know quickly if something is wrong. In Canada, the Financial Consumer Agency of Canada provides information on requesting a free credit report.
- Look for unexplained withdrawals, charges, and accounts. Review your bank account and credit card statements regularly. Look for unfamiliar charges, accounts, or withdrawals. Know when your bills are due; one tip-off for identity theft is when you stop receiving certain bills. This can happen because scammers have changed the address associated with your bank account or credit card. If bills don’t arrive on time, follow up with your creditors. Debt collectors may call you about debts that aren’t yours. You can also set up automatic alerts on your accounts, so you are notified every time a transaction is made.
What BBB got wrong.
One of the BBB reps gave the advice that homeowners should not pay for someone to monitor their home title. The reason for this advice seemed to be her belief that the monitoring services won’t have someone walking into the county recorder’s office to check your title, and this is the only way to do it.
What she doesn’t know is that the title monitoring services get their data from two huge real estate data companies, who actually do send runners to the recorder’s offices in every county as often as each county updates its records. In some counties, they go daily because there are new records. In other counties, they only need to go every couple weeks. They take copies of every deed that was recorded during the interim, they scan them in, and they organize them. The title monitoring services use these organized deeds to monitor the titles of their subscribers anywhere in the country.
Very few homeowners will check their title histories for fraud as often as they should, especially since many counties do not have their recorded documents online. Title monitoring is an easy option. Furthermore, it gives peace of mind like homeowner’s insurance. Even though very few homes actually burn down, homeowners want the assurance that if theirs does, they are covered.
It’s the same with title monitoring. We estimate that as many as 10,000 property owners are victimized every year nationwide. With a title monitoring service, the true owner gets notified early enough to take action and prevent too much financial damage.
Conclusion: Good for the BBB for its Home Title Lock Review
I am happy to report that the BBB has taken an interest in home title fraud, and they have begun to make appearances on local news shows. They provide good advice to people about how to protect their identities in general, which could help prevent fraudsters from targeting them for deed fraud. However, they understate the seriousness of this crime and the fact that it is likely to be growing in frequency because criminals know it to be both easy and lucrative.
– David Fleck, CEO