In the evolving world of real estate, technology has been a double-edged sword. While it has revolutionized the way homes are bought and sold, it has also created opportunities for scammers to exploit unsuspecting buyers.
One of the most insidious threats that has emerged recently is the use of deepfake technology. By mimicking real estate agents and sellers, scammers are now orchestrating elaborate schemes to steal down payments.
The Emergence of Deepfake Technology in Fraud
There’s no denying that artificial intelligence has been doing wonders for many businesses across industries. However, the advent of AI, especially generative AI, has also introduced deepfakes.
As noted by Statista, it has become extremely easy for scammers to fine-tune their prompts and create real-like images and videos. The US has been among the top countries where the cases of deepfake fraud have increased from 2022 to 2023. Vietnam and the Philippines are the only two countries with more deepfake-related fraud than the USA.
Deepfake technology, powered by advanced artificial intelligence (AI), allows for the creation of hyper-realistic videos and audio recordings. Initially celebrated for its potential in entertainment and virtual communication, it has now become a tool for malicious actors. Scammers use deepfakes to impersonate individuals, crafting convincing video calls that deceive buyers into believing they are interacting with legitimate real estate professionals.
In real estate, where trust is paramount, this technology poses a significant threat. Buyers often rely on virtual tours and remote interactions to finalize deals, especially in the post-pandemic world where online transactions are the norm. Deepfake scams exploit this dependency on digital communication, creating an environment where buyers cannot discern authentic interactions from fraudulent ones.
How Scammers Execute Deepfake Real Estate Scams
The typical deepfake real estate scam begins with the acquisition of publicly available information about a legitimate real estate agent. Scammers scour social media profiles, professional websites, and online reviews to gather data, including photos, videos, and voice samples. With this information, they use AI tools to create a deepfake representation of the individual.
Once armed with a convincing digital likeness, the scammer engages with prospective buyers. According to the National Association of Realtors, they may use deepfake videos to conduct virtual meetings, presenting themselves as the agent. In fact, even listings are being created with the help of AI to make the deals feel more authentic. The deepfake mimics facial expressions, speech patterns, and other nuances of the person being impersonated.
The scam typically culminates in a request for a down payment or deposit to secure the property. Scammers provide seemingly legitimate bank details or escrow accounts, urging buyers to act quickly to avoid losing the deal. By the time the buyer realizes something is amiss, the funds have been transferred, often to untraceable accounts.
The Consequences for Buyers and the Real Estate Industry
The financial impact of real-estate deepfake fraud on victims is devastating. Down payments can amount to tens or even hundreds of thousands of dollars. This represents several years of savings, especially for a common citizen with a standard job. Beyond the financial loss, victims also face emotional trauma and the logistical nightmare of recovering their funds or restarting the home-buying process.
Agents and firms may find their reputations tarnished if they are unknowingly implicated in such schemes. Additionally, the increasing prevalence of these scams forces the industry to invest heavily in security measures, driving up operational costs.
Even real estate and title companies can be scammed with the help of deepfakes. For instance, Local10.com covered a story where a scammer used an image of a missing woman to create a deepfake. During a Zoom call with the title company, the scammer said that they wanted to sell a property. When asked to show living proof, the scammer left the call.
Spotting and Preventing Deepfake Scams
While deepfakes are becoming increasingly sophisticated, there are often subtle signs of manipulation. Video anomalies, such as unnatural blinking, mismatched lip movements, or slight distortions, can be indicators of a deepfake. Audio deepfakes may exhibit inconsistent tone or intonation.
Buyers should always verify the identity of the agent through independent channels, such as their official contact details. Avoid making payments without thoroughly vetting the recipient’s credentials.
Real estate firms can play a critical role by implementing stringent verification processes and educating clients about potential scams. They can simply introduce a single step of selfie ID verification. This simple step can be very effective in identifying living proof, as was asked by the title company in the above example.
Something like AU10TIX selfie ID verification technology can detect spoofing attempts within a few seconds. Thus, even if the scammer tries to use a synthetic identity to create a deepfake, an ID verification solution can catch it. This can prove to be beneficial for both buyers and the real estate agents.
The Role of Regulation and Technology
The very technology used to create deepfake and scam people can be used to fight it as well. Combating deepfake scams requires a collaborative effort between technology developers, regulators, and the real estate industry. AI-driven detection tools are being developed to identify deepfakes in real time, offering a layer of protection against these schemes.
Governments and industry associations are also working on stricter regulations to hold scammers accountable and safeguard digital transactions. The onus is on all stakeholders to stay ahead of the curve. By leveraging technology, the industry can mitigate the risks posed by deepfakes and restore confidence in digital real estate transactions.
As stated in an IEEE Spectrum article, detection technology is ahead of deepfakes for now. Therefore, you can use it to identify any such fraudulent attempts. However, this may not remain the same forever as technology becomes more sophisticated. Experts say that the algorithms to create images and videos and those to identify deepfakes will become locked.
Frequently Asked Questions
Can deepfake scams happen during virtual property tours?
Yes, virtual property tours can be a part of deepfake schemes. Scammers can fabricate the presence of a property totally or alter video footage to make it seem more appealing. When the film is fake, buyers might believe they are witnessing an authentic tour. Due diligence, such as physically inspecting the property or hiring reputable local inspectors, may become even more important as a result.
Do deepfake scams have a chance of targeting sellers?
Of course. Scammers can mimic sellers by using deepfake technology to pretend to be the owner of the property. This is particularly prevalent in transactions in which buyers and sellers do not physically meet. By posing as the seller and supplying fictitious bank account information, scammers may attempt to divert money from legal transactions.
In a video call, how can I verify an agent’s identity?
Ask an agent for distinctive information, such as their license number, and compare it with government records to verify their identity. To be sure you are talking to the right person, arrange a follow-up call using the agency’s official phone number. Using platforms for communication that are safe and verified can also lower risk.
Technology has made real estate more convenient, but it has also made things more complicated. The buying experience has been enhanced by technologies like virtual tours and automated procedures. However, they have also made it easier for sophisticated frauds like deepfakes to operate.
Buyers need to be alert, knowledgeable, and cautious in their dealings and payments. The real estate industry is constantly fighting to keep one step ahead of scammers as deepfake technology advances.
