ALTA | September 17, 2024
Seller impersonation fraud is a rising trend that costs cost title insurance companies and homeowners billions of dollars in losses each year. Sophisticated fraudsters often use the property owner’s Social Security and driver’s licenses in these transactions.
ALTA and the National Notary Association created this handout with tips to help verify and check state identification cards during an in-person notarization. The tips sheet highlights these procedures:
- Use tools of the trade
- Know your state’s IDs
- Handle the ID
- Compare the physical description, photo and signature
- Inspect the front and back of ID
- Check for signs of tampering
- Check expiration date
- Look for signs of deceit
Seller impersonation fraud attempts continue to increase as 28% of title companies experienced at least one of these incidents in 2023, according to a study conducted by ndp | analytics. The study, which included responses from 783 title companies across the United States, also showed that two out of 10 title companies experienced a seller impersonation fraud attempt in April 2024.
Also called seller ID fraud, the scam is most rampant in the high-volume states of California, Florida, and Texas, but schemes have targeted property owners throughout the country, from rural areas of the south to cities in the Midwest.
The surge in seller ID fraud has also resulted in higher title claims. According to recent analysis conducted by global consulting and actuarial firm Milliman, fraud and forgery claims represent 21 percent of the total dollars spent by title insurers on claims expense and losses. The analysis examined nearly 130,000 title claims from 2013 to 2022, finding that fraud and forgery claims were among two of the top three leading causes of loss. The study also concluded that claims of this nature are five times more costly—more than $143,000 in total average claim costs—than all other claims.
