Your home and retirement account are likely two of the most valuable assets you own, according to a study by the Pew Research Center.1 After years of accumulating wealth and building equity, you have significant value on your hands, and unfortunately, others (with less than noble intentions) know this as well.
Fraud and scams exist in many forms, but as you near retirement, certain scams become more prevalent. Deed fraud and financial scams, for example, increasingly target those with significant equity and retirement savings. Let’s take a closer look at what deed fraud is, other scams to look out for, and how to protect yourself moving forward.
What Is Deed Fraud?
Quitclaim deed fraud, or home title theft, occurs when a property is illegally transferred to someone else without the real owner's knowledge. Scammers will typically use either a fake ID or forged documents to record a transfer with the county recorder of deeds.
Once they’ve successfully accessed the deed, scammers typically either:
- Transfer the property to themselves
- List it for sale
- Take out a mortgage on the property
- Rent it out
Yes, it’s possible a criminal could put your home on the market without your knowledge. And when something does occur, you (the homeowner) will likely need to get the courts involved to regain possession of the deed and, depending on how far along the scam is, evict tenants.
The good news is that deed fraud is most prevalent when a property is unoccupied. In fact, a survey by the National Association of Realtors found that 62% of deed fraud cases involved vacant property, compared to 12% of owner-occupied homes.2
Why Is Deed Fraud a Growing Concern?
Similar to other types of scams, digital and technological advances have made deed fraud easier for scammers. Property records are available online, removing the physical barrier of going in person to an office. In addition, forgery tools have become increasingly sophisticated, making it difficult to spot the difference between real documents and a fake.
COVID-19, in particular, made online real estate transactions more commonplace, increasing the prevalence of digital transfers (by both legitimate owners and bad actors).
According to the FBI, the following scenarios are becoming increasingly common (particularly for older homeowners):3
- Scammers sort through public records to identify vacant land parcels or properties, specifically ones without a mortgage or lien. They impersonate the landowner and ask a real estate agent to list the property.
- Family members convince older homeowners to transfer the property into their name for financial gain.
- “Title pirates” use fraudulent or forged deeds to sell a property. Often, the fraud isn’t detected until the money goes through and the sale is recorded.
How to Spot Deed Fraud
Just as online access to records makes deed fraud more prevalent, it can also make it easier for homeowners to catch.
Your county clerk’s office may allow you to set up title alerts, meaning you’ll be notified in the event there’s an inquiry or action involving your home’s deed. You should also be able to set up online search alerts for your property. This will be the most effective way to monitor and catch fraudsters in the act.
If you own unoccupied or rented property, drive by occasionally to check if anything appears suspicious. Your management company should be able to do this as well if you’re not local. Your neighbors may be willing to keep an eye out too, letting you know if they see unusual activity around the property.
Similarly, if you do not live at the property, keep track of utility bills. If you see a sudden increase in water, electricity, or other utilities, it’s worth checking into. Property tax bills are another good indicator. If you see a change in your property tax bill, contact the county immediately.
If you stop receiving bills altogether for your property (including taxes and utilities), this is a good indicator that a fraudulent title transfer may have occurred.
What to Do if You Suspect Deed Fraud
If you’re concerned that deed fraud has occurred, file a complaint with the FBI’s Internet Crime Complaint Center (IC3) and contact your county recorder or registrar of deeds to verify a change.
You’ll also need to notify your mortgage lender (if you have one) and file a police report for identity theft. It might not hurt to freeze your credit as well, in case the fraudster is impersonating you or attempting to take on a mortgage in your name. Depending on what’s occurred, you may need to consult with a real estate attorney and file a lawsuit to restore ownership of the property.
Other Scams to Watch For
Of course, deed fraud isn’t the only scam those in or near retirement are susceptible to. Some other common scams to watch for include:
Identify Theft
Seniors are the most vulnerable to identity theft and scams, with collective losses exceeding $3.4 billion annually (and increasing).4
Investment scams, in particular, are the most costly fraud for seniors, costing $1.2 billion annually.4 This is significant, since those investments are used to fund retirement and such losses can be detrimental to a victim’s long-term financial well-being—particularly if never recovered.
Account Takeovers
Account takeover (ATO) fraud occurs when a hacker or scammer uses stolen credentials to illegally gain access to your accounts, including banking and investment accounts at financial institutions. Once account access is gained, scammers can drain funds, retrieve personal information, or make unauthorized purchases and transfers from the account.
ATO fraud is often the result of a phishing or malware scam, but can also happen when companies experience a data breach (since users commonly use the same password across different accounts).
Again, this type of fraud can put retirement accounts at greater risk.
Phishing Emails
A phishing email or website is designed to appear to come from a legitimate, familiar source (e.g., the university or benefits administrators). It may be designed to look just like the real thing and include information that appears legitimate.
But phishing emails are designed to gain a reader’s trust and persuade them to take action—click a button that installs malware or collect login credentials/personal information, for example.
Phishing emails can be difficult to spot, but some telltale signs include:
- Different email address (often with many different characters)
- Grammar mistakes and typos
- Urgent or threatening language
- Information that is irrelevant to you or incorrect
If you’re unsure whether an email is legitimate, open a new web browser, find the company’s website, and contact them using the email address or phone number listed on their site. From there, you can confirm whether action really is required.
Keep in mind that most major organizations (including the IRS or DMV) will not contact you via email or text.
How to Protect Yourself From Digital Scams
Just as you can take a few preventative measures to protect against deed fraud, there are things you can do to avoid falling victim to financial scams. First and foremost, enable two-factor authentication on financial accounts (and any account that offers it). Doing so adds an additional layer of security to your accounts, making it much harder for scammers to gain access—even if your login credentials are compromised.
In addition, try to use a unique password for every account. You can use a master password manager to hold onto credentials in an encrypted vault, while keeping your accounts more secure in the event of a data breach.
Establish transaction alerts for credit cards and bank accounts to catch fraudulent charges in real time. Review your statements as well, at least quarterly, to confirm no suspicious activity.
Protecting Your Assets From Fraud
Online financial security needs to be a part of your retirement plan, as virtually every asset you own is susceptible to online fraud. If you have questions about protecting your home or retirement accounts from scammers, don’t hesitate to reach out and talk to our team. Just as you work hard to build your retirement nest egg, it’s important to keep it safe from scammers.
Sources:
1https://www.pewresearch.org/2023/12/04/the-assets-households-own-and-the-debts-they-carry/
2https://www.nar.realtor/research-and-statistics/research-reports/deed-and-title-fraud-survey
