GUEST SUBMISSION: Fraud continues to be a significant concern in the real estate industry, with new schemes emerging as technology advances.

These include both remote transactions, where AI-powered tools enable impersonation, and in-person transactions, where sophisticated editing software is used to create fraudulent photo IDs that look legitimate.

Fraud prevention is no longer solely the responsibility of one party and requires industry-wide collaboration to effectively mitigate risks and protect all involved.

Current fraud trends and emerging risks

The ongoing economic uncertainty has placed financial pressure on many Canadians, increasing their vulnerability to fraudulent schemes as some seek ways to make quick money.

Now, more than ever, it is important for industry professionals to stay informed on the types of fraud taking place so they can anticipate and prevent fraudulent transactions. The following are some of the key threats professionals should be aware of:

1. AI-driven impersonation and deepfake technology: Fraudsters are using AI to mimic voices and identities, making remote transactions riskier. With this technology, criminals can impersonate individuals during phone calls or virtual meetings in real time, bypassing traditional verification processes. This allows fraudsters to deceive real estate professionals and clients, often without the victim realizing it.
2. Synthetic identity fraud: This form of fraud involves creating fake identities by combining stolen and fabricated personal information. Fraudsters use these synthetic identities to establish credit profiles and apply for loans or other financial instruments. In the context of real estate transactions, this can lead to fraudulent property purchases or misappropriation of funds. These fake identities are difficult to detect, as they often appear legitimate on paper.
3. Email hacking for wire transfer fraud: A growing threat in real estate transactions is email hacking, where fraudsters infiltrate email systems to monitor and manipulate transactions. Hackers access business email accounts, track upcoming transactions, and send spoofed emails with altered payment instructions. These emails often go unnoticed until it’s too late, resulting in financial losses. For example, a law firm handling a property purchase receives an email from the vendor’s solicitor, redirecting closing funds to a different account. In the rush to close, the lawyer complies, only to later discover that the email was a fraudulent request from a spoofed account.

Working together to prevent fraud

Combating fraud in real estate requires collaboration across the industry. Fraudsters operate in sophisticated networks, and a united response is essential to tackle these threats.

This includes cooperation between financial institutions, real estate professionals, legal experts and even consumers.

By working together, industry professionals can share expertise and resources, helping to identify new threats and enhance fraud prevention measures. Investment in technology, such as AI-powered ID verification, biometric authentication and real-time risk analysis will be critical in strengthening fraud protection.

Collaboration also means educating consumers about how to recognize potential fraud and protect their personal information. By teaching clients to spot red flags and take preventive steps, the industry can help safeguard transactions.

Key red flags include:

• Inconsistent credit history or unusual financial activity,
• Rushed transactions that leave little time for verification,
• Unverifiable or incomplete client information.
• Professionals should also implement a multi-layered security approach, combining strict identity verification, biometric authentication, and multi-factor authentication. This will enhance the security of each transaction and make it harder for fraudsters to succeed.

Looking ahead: The future of fraud prevention

As technology continues to evolve, so too will fraud.

To stay ahead, it will be important for real estate professionals to strengthen collaboration not only within the industry but across sectors. By working together in a connected ecosystem, professionals can share resources, data and best practices to better mitigate fraud risks.

Looking ahead, the success of fraud prevention will depend on continuous innovation, education and collaboration.

By uniting efforts, we can protect transactions, secure consumers’ assets, and ensure the integrity of the real estate industry.