Wire Fraud Statistics: Fraud by the Numbers [2024 Update]

Imagine this: you're closing a significant real estate deal, culminating in weeks, if not months, of negotiation and paperwork. Then, in a blink, the funds intended for the transaction are diverted to a fraudster's account. You’re shocked and lost and the buyer is out thousands. This is wire fraud: deceptive, swift, and devastating.

Unfortunately, real estate wire fraud is not rare; it’s a growing threat, impacting thousands of title agents, real estate agents, attorneys, buyers, and sellers. New research, detailed in the FBI IC3’s 2023 Internet Crimes Report and uncovered for our 2024 State of Wire Fraud Report, reveals the alarming rise in these incidents, driven by technological advances and sophisticated social engineering.

So, just how much does wire transaction fraud impact consumers and our economy, and what can we do to fight back? Let’s take a closer look at the numbers.

Why do fraudsters target real estate transactions?

The real estate sector's vulnerability stems from its inherent nature - high-value transactions and a complex web of communication among multiple parties. Real estate transactions and processes have also moved increasingly online. While efficient, this opens up avenues for fraudsters to intercept and manipulate communications, leading to unauthorized wire transfers.

Since 2020, fraudsters have increasingly taken advantage of real estate’s vulnerabilities. The result: billions in funds lost because of fraud across the country.

Wire fraud: a growing national threat

The impact of wire fraud is far-reaching and significant. Since its inception in 2000, the FBI IC3 has recorded over 8 million complaints, an average of 2,412 complaints daily.

In 2023, the FBI IC3 (Internet Crime Complaint Center) received a total of 880,418 complaints, marking a 10% increase from 2022. The bottom line: wire fraud is growing at a dangerous scale. Here are some of the most eye-catching statistics shared by the FBI IC3 in their latest report.

22% YoY increase in losses

New data reports a 22% year-over-year increase in cybercrime losses. This was a stark increase partly driven by new types of fraud, including cryptocurrency scams.

$12.5 billion in lost funds

A significant chunk of this figure is attributed to investment fraud ($4.6B), followed by business email compromise (BEC) scams, with the real estate sector bearing a considerable brunt. Tech support scams, largely targeting seniors, accounted for $0.9B in losses.

The U.S. had over 522K fraud complaints

The United States continued to lead all countries in cyber crime in 2023. The FBI IC3 reported a staggering 521,652 instances of cybercrime. This places the U.S. significantly ahead in terms of cybercrime incidents compared to other countries around the globe. The United Kingdom was second in total complaints with 288,355.

The sheer volume of complaints in the U.S. shows that the U.S. is a major target for cybercriminals. It’s a reminder that stronger cybersecurity measures and more awareness are necessary for any business transacting in the United States.

Business Email Compromise (BEC) topped $2.9B in losses

Business Email Compromise (BEC) — the primary cyber crime type in real estate wire fraud — remains a formidable adversary for professionals and individuals. In 2023, BEC scams accounted for $2.9 billion in reported losses. 

Advancements in AI and instant payment technologies have expedited transactions and opened up new avenues for fraudsters phishing for data. Fraudsters have learned to exploit these tools, employing social engineering tactics that make to easier to manipulate.

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To Catch a Fraudster: Listen to a conversation on Business Email Compromise between Yahoo's Senior Fraud Investigator Jordan Kramer and our Executive Chairman Tom Cronkright.

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Consumers facing the brunt of wire fraud

The emotional and financial toll of wire fraud on consumers cannot be overstated. Our 2024 State of Wire Fraud report paints a more granular picture of the threat to consumers in real estate transactions. We surveyed 650 U.S. home buyers and sellers to learn how wire fraud challenges their real estate experience. Here are the findings.

1 in 4 consumers are targeted with suspicious communications

Think you could never be the target of wire fraud? Think again. According to our surveyed consumers, nearly a quarter of consumers received suspicious or potentially fraudulent communications during their closing.

1 in 20 consumers became a victim of wire fraud 

Of those targeted and pursued, 1 in 20 consumers became a victim. Compare this to other types of catastrophic life events like being in a motor vehicle accident (1 in 200).

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71% of consumers believe fraud education is someone else’s responsibility

Wire fraud is affecting home buyers and sellers at a rapid rate. Yet, many consumers are still not aware of the dangers. This is due to a few reasons:

1. There is an industry-wide lack of awareness about wire fraud tactics.
2. Consumers and businesses still believe fraud cannot happen to them.
3. Most consumers don’t believe wire fraud education is their responsibility.

The last point is critical; as stewards of the transactions, real estate professionals are being called to educate consumers. It’s no longer just a want; it’s now an expectation. Your job — and their livelihood — may depend on it.

So, what can you do to prevent wire fraud?

Despite all of the controls and protections banks, escrow companies, and consumers think they have in place, most are left flat-footed in the wake of a successful wire transfer fraud attack. 

Awareness is the first step to combating fraud. Real estate professionals, including title agents, underwriters, real estate agents, and attorneys, play a pivotal role in educating their clients about the risks of wire fraud. It's about creating an environment where questioning and double-checking become the norm, especially when it comes to wiring funds.

In addition, it’s important to think about your processes for verifying wires. Many real estate professionals haven’t updated their operational procedures in years — if not decades. With the increased dangers of wire fraud, now is the time to add new protections to ensure the safety of your clients and business.

Here are a few pointers:

• Stay Informed: Knowing about these risks is the first step to protecting yourself and your clients. Subscribe to our weekly newsletter The Wire for the latest on wire fraud.
• Verify Everything: Always double-check details, especially for transactions, using secure methods.
• Use Protection Tools: Services like CertifID can help secure transactions against these frauds.

Stop from becoming another statistic

The numbers don't lie. Wire fraud is a significant risk that demands our attention and action. For real estate professionals, being proactive about security isn't just smart—it's essential.

Interested in beefing up your transaction security? See how CertifID can help.

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