Fraud in real estate is rapidly evolving, with AI playing a central role.
AI-driven tools are facilitating easier impersonation of homeowners, manipulation of transactions, and creation of sophisticated fake IDs, as stated in the 2025 FCT Fraud Insights Report.
Deepfake scams and AI-generated voices
Gone are the days of simple identity fraud. FCT reports that AI-powered deepfake technology is now being utilized to replace a fraudster’s face with a homeowner’s face in real-time during virtual meetings. This means that criminals can convincingly pose as property owners even in live video calls.
“AI text-to-speech tools and real-time voice modulation allow fraudsters to alter their apparent age, gender, and accent to align with their fabricated story,” the report cautions, highlighting how spoofing tools enable fraudsters to mimic authentic numbers.
Real estate market pressures are driving fraud
In addition to technological advancements, economic circumstances are also fueling the surge in fraud.
“We frequently observe a direct correlation between a declining market and heightened financial desperation, which drives certain individuals to resort to drastic measures,” notes Daniela DeTommaso, president of FCT.
Organized crime is capitalizing on the situation by utilizing ‘straw buyers’—individuals with clean backgrounds who are paid to carry out fraudulent transactions. Wire fraud remains a significant concern, with cybercriminals infiltrating email accounts to intercept and redirect closing funds.
Red flags for Realtors
Despite the increasing sophistication of fraudsters, common warning signs remain the same. Some typical indicators of fraud include clients refusing to verify their ID in person, requests to send funds to a third party, rushed deals (especially towards the end of the month), or transactions involving recently acquired, mortgage-free properties.
How the industry is combatting fraud
As fraud techniques evolve rapidly, the real estate sector is enhancing its defenses. More companies are incorporating multi-factor authentication, biometric security, and Know Your Customer procedures to bolster ID verification, according to the report.
FCT also anticipates that the industry may witness the first instance of mortgage title fraud carried out by a non-human entity: AI tools utilized by fraudsters can be consolidated and controlled by a single algorithm, with its directives shaped by the fraudster, and then deployed for ‘hands-off’ execution.
AI is not only being used for fraud; experts in fraud prevention suggest it will also play a role in the solution. The report predicts that financial institutions will likely invest in developing AI-powered defenses against AI-driven fraud.
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