50 Statistics That Show the Threat of Real Estate Fraud in 2019

More than half the world’s population is now online, and as we look for simpler, more convenient solutions to everyday issues, we’ll move our most sensitive information online – if we haven’t already.

This is a great concern for many in the real estate space, where thieves have used this information to steal the down payments – often the life savings – of thousands of prospective homeowners.

Fraud is becoming more common as Internet scams become more creative and complex. Here are 50 statistics that show the threat of real estate fraud in 2019.

It's Hard to Prevent Data Breaches

  1. There were 10,343 data breaches recorded between Jan. 1, 2005 and May 31, 2019. (ID Theft Resource Center, 2019)
  2. 1.48 billion records were exposed between Jan. 1, 2005 and May 31, 2019. Each record includes an individual's name plus their Social Security Number, driver's license number, a medical record, a financial record, or credit and debit information. (ID Theft Resource Center, 2019)
  3. It takes companies an average of six months to detect a data breach. (ZD Net, 2015)
  4. Antivirus software blocked 5.4 billion WannaCry virus attacks in 2017. (Symantec – 2018 Internet Security Threat Report)
  5. There was a 22.7% increase in cyber security costs from 2016 to 2017. (Accenture, 2017)
  6. Damage related to cybercrime is projected to hit $6 trillion annually by 2021. (Cybersecurity Ventures, 2017)
  7. 74% of companies have over 1,000 stale sensitive files. (Varonis – 2018 Global Data Risk Report)
  8. 41% of companies have over 1,000 sensitive files – including credit card numbers and health records – left unprotected. (Varonis – 2018 Global Data Risk Report)
  9. 69% of organizations don’t believe the threats they’re seeing can be blocked by their antivirus software. (Ponemon Institute – 2017 Cost of Data Breach Study)
  10. 70% of organizations say that they believe their security risk increased significantly in 2017. (Ponemon Institute – 2017 Cost of Data Breach Study)
  11. 21% of all files are not protected in any way. (Varonis – 2018 Global Data Risk Report)
  12. Nearly half of the security risk that organizations face stems from having multiple security vendors and products. (Cisco – 2019 Cybersecurity Report Series)
  13. 61% of breach victims in 2017 were businesses with under 1,000 employees. (Verizon – 2017 Data Breach Investigations Report)
  14. 71% of cyber attacks in 2017 relied on spear-phishing emails. (Symantec – 2018 Internet Security Threat Report)
  15. 71% of breaches are financially motivated. (Verizon – 2019 Data Breach Investigations Report)
  16. Wire fraud is responsible for at least $5 billion in losses to consumers since 2013. (National Mortgage News, 2018)

Compromised Email Scams Are on the Rise

  1. There was a 136% increase in identified global exposed losses due to Business Email Compromise (BEC) and Email Account Compromise (EAC) scams between December 2016 and May 2018. These scams are a form of financial fraud that target wire transfers by both businesses and individuals.  (FBI – July 2018)
  2. Companies targeted by BEC/EAC received about 120 fraudulent emails in the fourth quarter of 2018 – up from 36 in the third quarter of 2018 and up from 21 in the fourth quarter of 2017. (Proofpoint, 2019)
  3. All 50 states and 150 countries have reported BEC/EAC scams. (FBI – July 2018)
  4. The FBI received 20,373 BEC/EAC complaints in 2018. (FBI – July 2018)
  5. BEC/EAC scams claimed resulted in losses of $1.3 billion in 2018 – nearly four times more than the second-most lucrative form of fraud. (FBI – 2018 Internet Crime Report)
  6. Across 18,606 BEC scams, the media amount stolen was $24,439. (Verizon – 2019 Data Breach Investigations Report)
  7. September 2017 reported the highest victim loss at nearly $19 million. (FBI – July 2018)
  8. There were 11,300 reported cases of BEC/EAC real estate fraud in 2018. (FBI – 2018 Internet Crime Report)
  9. $150 million in personal assets were stolen in BEC/EAC real estate scams in 2018 (FBI – 2018 Internet Crime Report)
  10. The number of reported BEC/EAC real estate scams rose 1,100% from 2015 to 2017. (FBI – July 2018)
  11. The losses reported from BEC/EAC real estate scams rose 2,200% from 2015 to 2017. (FBI – July 2018)
  12. $19 million was “diverted or attempted to be diverted” from real estate purchase transactions and wired to “criminally controlled” accounts in FY16. (Miami Herald, 2017)
  13. $969 million was “diverted or attempted to be diverted” from real estate purchase transactions and wired to “criminally controlled” accounts in FY17. (Miami Herald, 2017)
  14. 52.2% of homebuyers are completely unaware of wire fraud in real estate. (BuyerDocs, 2018)
  15. 74% of homebuyers believed their title company or bank could recover funds that are wired to the wrong account. (BuyerDocs, 2018)
  16. Half of all US-based business email compromises had 99% of the money recovered or frozen; and only 9% had nothing recovered. (Verizon – 2019 Data Breach Investigations Report)

Real Estate Fraud Takes Many Forms

  1. The real estate space saw the second-most malware events of any industry in the second quarter of 2018. (REALTOR Magazine, November 2018)
  2. Mortgage fraud risk jumped more than 12% year-over-year at the end of the second quarter of 2018. (CoreLogic – 2019 Mortgage Fraud Report)
  3. One in every 109 mortgage applications is estimated to have indications of fraud. (CoreLogic – 2019 Mortgage Fraud Report)
  4. Suspicion of income fraud – where the borrower’s income or employment information may be inflated or fabricated – has been the basis for 25% or more of all mortgage fraud investigations each year from 2015 to 2018. (Fannie – Q1 2018 Mortgage Fraud Loan Trends)
  5. In 2017, 45% of loans investigated for mortgage fraud were related to income. (Fannie – Q1 2018 Mortgage Fraud Loan Trends)
  6. In 2018, Fannie Mae received nearly 80 tips about potential income fraud on mortgage applications – a 900% increase from 2017. (Fannie Mae – Q1 2019 Mortgage Fraud Tip Trends)
  7. In 2018, Fannie Mae received nearly 60 tips about identity theft on mortgage applications – a 20% decrease from 2017. (Fannie Mae – Q1 2019 Mortgage Fraud Tip Trends)
  8. In the first quarter of 2019, California – a state which makes up roughly 12% of the total U.S. population – produced 24% of all reported instances of mortgage fraud. (Fannie Mae – Q1 2019 Mortgage Fraud Tip Trends)

Take Password Security Seriously

  1. 59% of people mostly or always use the same password or a variation of the same password across their accounts. (LastPass – The Psychology of Passwords, 2017)
  2. Only 57% of people say a major retailer or bank breach would make them change a password for an online account to make it more secure. (LastPass – The Psychology of Passwords, 2017)
  3. 7 out of 10 people use the same passwords for their social media accounts as for their corporate email. (ValueWalk, 2018)
  4. In 2018, Facebook engineers identified a security flaw that exposed the personal data of 50 million users. (Facebook, 2018)
  5. In 2016, a hacker attempted to sell 117 million LinkedIn username and password combinations initially stolen during a 2012 data breach. (Vice, 2016)
  6. In 2018, Twitter asked its 330 million users to change their passwords after a bug exposed them in plain text. (The Verge, 2018)
  7. 59% of businesses polled have zero visibility or access into their employee password practices. (Ponemon Institute, 2017
  8. 65% of these businesses have a password policy which they don’t bother to enforce. (Ponemon Institute, 2017)
  9. 65% of companies have over 500 users who never are never prompted to change their passwords. (Varonis, 2018 Global Data Risk Report)
  10. Only an estimated 10-15% of fraud is ever reported, meaning these numbers are just the tip of the iceberg. (FBI – 2016 Internet Crime Report)

Download our free guide: 3 Easy Ways to Identify Real Estate Fraud