REALTORS® may become prime targets for scammers because they frequently handle large sums of money in their practice and their work requires a constant exchange of sensitive information. This provides bad actors with opportunities to insert themselves into the transaction process without anyone being aware. In order to prevent such situations, it is important for REALTORS® to make cybersecurity a top priority. Tennessee REALTORS® CEO Angela Shields sat down with Josh DeVine, Communications Director at the Tennessee Bureau of Investigation (TBI), and discussed the most common real estate scams found in Tennessee, the red flags to look out for, and what to do if you’ve fallen into a scam.

 

Cybercrime is constantly evolving, and scams are becoming more and more sophisticated, especially with the advent of artificial intelligence (AI). Online scams are big business. In 2024, the U.S. lost over $2 billion from compromised business emails, with Tennessee losing about $47 million alone. “…It really requires REALTORS® to be discerning, and to vet things but to also be very cautious. Opportunities may not really be opportunities,” says DeVine. REALTORS® should have best practices in place and note to themselves that if it sounds too good to be true, it probably is.

 

Three common scams found in Tennessee’s real estate industry:
  1. “Pig butchering” (investment) scams;
  2. Cyberattacks involving compromised emails (ex, phishing);
  3. Ransomware (malware that is installed and infects the computer and encrypts/locks users out of files and system), and data breaches (ie, unauthorized access of client databases and compromised personal identifying information).

 

A pig butchering scam is a type of investment fraud where scammers build trust and a relationship with the victims (often through social media or online dating) and deceive them into investing in a fake cryptocurrency or investment platform. The name “pig butchering” comes from the comparison of the pig slaughtering process: it includes fattening up the pig (ie, the victim’s finances) before “slaughter” (the action where the scammer proceeds to take all of the victim’s money). Other common cybercrime scams to be aware of include romance scams (victims are usually older individuals, especially divorced or widowed) and sextortion (victims are usually younger individuals or children).

 

Josh emphasized that it is important to never rely solely on email for financial transactions. You should verify and vet the person who is handling the money through other means, such as  meeting them face-to-face. He advises REALTORS® to never send out wiring instructions to clients and only send the information to the title company involved in the transaction.

 

There are five red flags to look out for during the transaction process:
  1. Changes that occur during the final stages of closing;
  2. Slight changes to the email address, or if the domain looks different.
  3. Language is urgent/pressing and needs you to take action ASAP.
  4. Major grammatical and spelling errors in emails.
  5. Wiring instructions sent to you as an attachment.

 

REALTORS® can be proactive and do their part to avoid scams by doing the following:
  1. Do not release personal identifying information, financial information, or money to anyone you don’t know.
  2. Do not invest anything in the advice of someone you’ve met solely online. Meet them face-to-face, have a phone conversation, and do your due diligence to ensure the person is indeed who they say they are.
  3. Be suspicious and remember that if something sounds too good to be true, it’s probably not real.
  4. Make sure to contact law enforcement agencies so they may provide you with the resources that are available as a victim of a scam.
If someone has been defrauded, it is important for victims to step forward and report fraud to law enforcement, even if they are reluctant to do so. If they’ve been victimized, chances are it has happened to others, too. Law enforcement depends on these reports and tips in order to build connections, piece together cases, and see patterns of criminal enterprises. REALTORS® can do their part and report fraudulent listings, scam incidents, and/or tips to TBI at tipstotbi@tbi.tn.gov or the FBI’s Internet Crime Complaint Center.

 

It is critical for brokers to champion cybersecurity best practices in their firm to lower the risk of becoming a victim. Implementing features such as Two Factor Authentication (2FA) may help boost cybersecurity. The Department of Homeland Security’s CISA Cybersecurity Framework is a comprehensive 360° “toolbox” that brokers and business owners can refer to and see if they are up-to-date on cybersecurity. Josh also recommends members visit the TBI Cybercrime webpage for additional resources, such as easy-to-understand videos on the different types of scams online.

 

Cryptocurrency scams are becoming increasingly common. If you receive a call or text message stating you owe them money, do not send them your personal identifying information or financial information without contacting the respective agencies or organizations the person claims to work for on your own and verifying if you actually have unpaid/overdue fees or fines. Chances are that they are scams.

 

You can do your part and help prevent scams by reminding individuals (especially the elderly) and clients to take precautions when answering phone calls or texts from unknown numbers. It is also important to remember that REALTORS® are often targets because their phone number are available to the public due to the nature of their profession, and their line of work requires frequent communication with so many contacts. Scammers can easily use their phone number, email, or other contact information to take advantage of them or their clients.

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Want More?

Listen to the full episode of the Real Tea Podcast with Josh Devine HERE.