Millions lost to title fraud in 2023: Onchain solutions curb the issue – Inman

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In an era where almost everything can be purchased online with just a few clicks, many people ask me, “Is it possible to buy high-value assets like antique cars and real estate online?” The short answer is, “Yes.” The longer one is “Yes, but you need to know how to avoid the hidden pitfalls.”

In 2023, title fraud reached an all-time high, with Americans losing millions of dollars — even more alarming trends like cyberattacks are on the horizon. However, let me offer a beacon of hope — we’re currently at a pivotal moment that will transform the entire industry. If the statistic concerns you, yet you want to find out how to fight title fraud, keep reading.

Before diving deeper into the topic, it’s essential to understand how title fraud happens and why it’s been on the rise recently.

Title fraud occurs when scammers steal the property owner’s identity to forge documents and transfer ownership without the owner’s knowledge. They then file these fraudulent documents to sell the property quickly, leaving the real owner and the unsuspecting buyer to deal with the aftermath. 

Unfortunately, this kind of activity has spiked recently. In Q4 2023, wire and title fraud risk set a record. According to a report by FundingShield, 51.8 percent of transactions had issues that led to a risk of wire and title fraud. But that’s not all—cybersecurity challenges are also becoming increasingly prevalent. Notably, two of the four largest title firms, First American Financial and Fidelity National Financial, have recently suffered cyberattacks. These incidents underscore the urgent need to develop new methods for securing property rights.

Traditional method of preventing title fraud: Why they are no longer enough

The traditional way of preventing title fraud is all about paper documentation and manual verification. While these methods have been the backbone of property transactions for years, they are increasingly proving inadequate in today’s digital age. According to Statista, 66 percent of the world’s population has internet access, and 61 percent own a smart device.

As digitalization rises, so do cyberattacks and digital fraud techniques. These outdated practices struggle to keep up, leaving property owners vulnerable to fraudsters. To effectively protect our property rights, we need more robust and advanced solutions.

Advancing blockchain and AI: Propy’s pioneering onchain solutions

Two factors will completely reshape the title industry: Blockchain Technology and AI. Blockchain acts as a decentralized, transparent and immutable ledger that can securely store any data. Meanwhile, AI can automate lengthy procedures, saving time and boosting efficiency — the result: A more secure, transparent, and efficient method to transfer property rights. 

This is our core purpose at Propy Title — to offer next-generation title and escrow services, making transactions self-driving, just like Tesla.

In my previous Inman articles, I covered how one of the key tools, Propy AI, helps real estate professionals automatically fill out purchase agreements. 

To further reduce the risks associated with property transfers, Propy developed Propy KYC (Know Your Customer) and POF (Proof of Funds). These tools enable agents to verify the identity of prospective buyers and confirm their funds, whether in cash or cryptocurrency. By minimizing fraud risk and identifying legitimate buyers, everyone can be assured that the transaction is secure and trustworthy.

The Future of Title Security

Today, the real estate industry is facing a turning point that will bring not only transparency and better security but also greater property affordability around the globe. 

Onchain title will be crucial in safeguarding transaction integrity. It will be an essential step toward a new era of digital rights, empowering individuals to securely store and manage their own data.

I believe in technology. Do you?

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