Latest / Dishin' Dirt with Gary Pickren / The New Rules for Stopping AI Real Estate Fraud

Transcript

The New Rules for Stopping AI Real Estate Fraud · Dishin' Dirt with Gary Pickren

0:00
SPEAKER_01: So last week on Dish and Dirt, I probably scared you to death talking about artificial intelligence and real estate fraud and how artificial intelligence is doing a great job of helping criminals get better at real estate fraud.
0:12
SPEAKER_01: It's making it harder to detect, it's making the fake documents, the fake identification a whole lot harder to identify, and it's allowing criminals to get better at fraud.
0:22
SPEAKER_01: This week, I don't want to scare you.
0:23
SPEAKER_01: I want to try to help you.
0:24
SPEAKER_01: I want to give you a game plan, an attack plan to figure out how to go about protecting yourself, your business, your clients, whether it's your buyer or your seller, from artificial intelligence generated real estate fraud.
0:36
SPEAKER_01: It's not going to be easy because this is what I've been thinking about since that last episode.
0:41
SPEAKER_01: I think we literally could spend five years or so teaching every single party in a transaction, whether it's the agents, the lender, the attorney, the buyers, the sellers, how to recognize real estate fraud and artificial intelligence roles, and I don't think it's going to matter.
0:56
SPEAKER_01: We can say, look for this, listen to this, uh, check the photographs, looking for those watermarks, look at each of the emails, looking for those grammatical mistakes.
1:05
SPEAKER_01: Watch this person's face on Zoom.
1:06
SPEAKER_01: Does it look real?
1:07
SPEAKER_01: I'm not saying we shouldn't be educating ourselves about these warning signs.
1:10
SPEAKER_01: Those warning signs still help us recognize fraud.
1:13
SPEAKER_01: We should absolutely be doing that.
1:15
SPEAKER_01: But I don't think it's going to matter.
1:17
SPEAKER_01: I think eventually we're still going to lose the battle anyway, because the technology is just getting so much better.
1:22
SPEAKER_01: Artificial intelligence in the last three to six months is a million times better than it was just a year ago.
1:28
SPEAKER_01: Now think about this.
1:30
SPEAKER_01: If you receive the most convincing fake email that you've ever seen shows up in your inbox today, would you catch it?
1:38
SPEAKER_01: What if it came from your client's email address?
1:40
SPEAKER_01: What happens if it mentioned the client's name correctly, even used their nickname?
1:44
SPEAKER_01: What happens if the property address is correct, the closing date's correct?
1:47
SPEAKER_01: Everything about the transaction is exactly correct, proper grammar, even in the correct tone that your client communicates with you.
1:55
SPEAKER_01: But what if that person then calls you and has a telephone conversation with you and it sounds exactly like your client?
2:02
SPEAKER_01: Would you have procedures in place that would protect you?
2:06
SPEAKER_01: Or would you be relying on your ability or somebody else's ability in your office to realize that something just doesn't feel right?
2:13
SPEAKER_01: Because that is truly the problem that we're facing today is that artificial intelligence is getting so much better at making fake things look real.
2:23
SPEAKER_01: We already see it on social media.
2:25
SPEAKER_01: You see all the time celebrities saying and doing things that you think is real to find out it's a deep fake.
2:31
SPEAKER_01: I think that real estate professionals today have to stop asking, how do we get better at identifying what's fake and start asking how do we build a real estate transaction where it doesn't matter how good the fake is, that it's still not going to get through.
2:47
SPEAKER_01: Today we're gonna talk about how real estate agents, brokers, lenders, closing attorneys, and anybody else that's involved in a residential real estate transaction, how they can begin to build businesses fraud resistant by design.
3:00
SPEAKER_01: And I want to give you some procedures that you can actually use, not cybersecurity theories, not a bunch of technical jargon because I don't know any of it.
3:09
SPEAKER_01: I want to give you some things that you can actually take back to your office today and say, starting Monday, we're gonna be doing this thing differently.
3:16
SPEAKER_01: And it begins with understanding that one of the fundamental assumptions underlying the real estate transaction is change, and that is trust.
3:25
SPEAKER_01: So we're gonna talk about all of that and a whole lot more on this week's episode of Dish and Dirt.
3:31
SPEAKER_00: This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft.
3:39
SPEAKER_00: And now the host of Dish and Dirt, Gary Picker.
3:44
SPEAKER_01: I'm your often opinionated but rarely wrong host, Gary Picker, coming to you from the beautiful downtown Columbia, South Carolina offices of Blair Kato Pickering Castellan, this, the second week of August 2026.
3:55
SPEAKER_01: Last week, as I can tell from a lot of the emails and comments that I received, that I scared the hell out of a lot of you talking about AI and how AI is helping criminals make better real estate fraudulent transactions.
4:07
SPEAKER_01: AI is wonderful.
4:08
SPEAKER_01: It helps us do a lot of things more efficiently, safer, better, cleaner.
4:11
SPEAKER_01: But unfortunately, it's also helping criminals do the same thing.
4:15
SPEAKER_01: And we talked about the next generation of real estate fraud and what it would look like and how artificial intelligence was changing that criminal playbook.
4:21
SPEAKER_01: We talked about fake sellers, AI-generated identifications that are almost impossible to determine are fake from the originals, clone voices that can sound exactly like your client.
4:32
SPEAKER_01: We talked about deep fake video calls, we talked about fake proof of funds letter, QR code wire fraud, which is really scary, synthetic identities, fake inspection reports, and we ended with something I called the AI transaction hijacking.
4:46
SPEAKER_01: This is where the criminal doesn't necessarily attack the real estate transaction immediately.
4:50
SPEAKER_01: Instead, they're very patient.
4:51
SPEAKER_01: They get inside of an email account, they wait, they read the emails, they learn the transaction, they learn who the buyer is, who the seller is, who's the realtor, who the lender is, who's the closing attorney.
5:00
SPEAKER_01: But most importantly, they use AI to understand how everybody communicates, the jargon they use, the way people sign out of emails, and they simply wait for the moment when the money is about to move.
5:11
SPEAKER_01: And that's when they strike.
5:12
SPEAKER_01: And I ended that episode with a promise.
5:14
SPEAKER_01: That promise was that next week I wanted to continue the conversation by discussing how real estate professionals can actually redesign their business strategies to survive the age of AI fraud.
5:25
SPEAKER_01: Well, next week is here, and that's what we're going to do today.
5:27
SPEAKER_01: I don't think the solution is teaching everybody to become an AI expert.
5:31
SPEAKER_01: There's no possible way.
5:32
SPEAKER_01: I don't even think the AI experts can be experts anymore because it changes so much.
5:37
SPEAKER_01: Instead, I think we need to redesign our procedures so that the success of a fraud doesn't depend on whether somebody can recognize it as fraud, but rather they have a procedure in place to stop the fraud.
5:49
SPEAKER_01: And that starts with a fundamental change in how we think about trust.
5:54
SPEAKER_01: For most of human history, recognition has been one of the ways that we try to establish trust.
5:59
SPEAKER_01: Your phone rings, you recognize your spouse's voice, and you trust that it's your spouse.
6:04
SPEAKER_01: You receive an email from somebody that you've worked with for 10 years, you recognize the name, the email address is what it's supposed to be.
6:11
SPEAKER_01: You even recognize perhaps their writing style, their signature, the way that they speak, so you trust it.
6:16
SPEAKER_01: Or you get on Zoom with a client, you see them, you hear them, so you trust that in fact it is them.
6:21
SPEAKER_01: Even if somebody hands you a driver's license, you got a photograph that matches, the watermarks line up, the information matches, it all seems and looks legit, so you trust it.
6:32
SPEAKER_01: But artificial intelligence is beginning to break that connection between recognition and authenticity.
6:37
SPEAKER_01: And that's the big problem because that leads to what I think is one of the most important concepts for real estate professionals to understand.
6:44
SPEAKER_01: Recognition is not authentication.
6:47
SPEAKER_01: Just because you recognize something doesn't mean that it's actually real.
6:52
SPEAKER_01: A voice can potentially be cloned.
6:54
SPEAKER_01: Photograph can certainly be generated by AI.
6:57
SPEAKER_01: You can have a document that's been fabricated, changed, modified very easily.
7:02
SPEAKER_01: An email account can certainly be compromised.
7:05
SPEAKER_01: It happens all the time.
7:07
SPEAKER_01: And now, because of AIs, somebody's writing style can be imitated to the point that it seems exactly like them.
7:13
SPEAKER_01: We've spent years teaching people how to spot phishing.
7:16
SPEAKER_01: Look for the bad grammar.
7:18
SPEAKER_01: They have weird wording.
7:20
SPEAKER_01: Look for something that doesn't make any sense.
7:22
SPEAKER_01: It doesn't sound like the person that you've been talking to.
7:25
SPEAKER_01: But what happens now when criminals have access to AI?
7:28
SPEAKER_01: Now they can actually imitate how that person actually communicates.
7:31
SPEAKER_01: Suddenly, it's that sounds like Gary, but that isn't good enough.
7:36
SPEAKER_01: The problem is now one of our best fraud detection tools, which was our intuition that something doesn't sound right, something doesn't feel right, that's now become a lot less reliable.
7:46
SPEAKER_01: And that's why I think that our industry needs this fundamental shift.
7:50
SPEAKER_01: For years we've been talking about fraud detection.
7:53
SPEAKER_01: Try to spot that bad guy.
7:54
SPEAKER_01: We try to recognize that fake.
7:56
SPEAKER_01: And we've done a pretty good job about that as an industry.
7:58
SPEAKER_01: But I want us to start thinking about fraud-resistant design.
8:02
SPEAKER_01: And that's a huge difference.
8:04
SPEAKER_01: Fraud detection says this email looks somewhat suspicious.
8:07
SPEAKER_01: But if fraud-resistant design says it doesn't matter if the email looks suspicious, any request to a change in financial instructions has to go through the same verification procedure.
8:17
SPEAKER_01: If the email is fraudulent, whether you recognize it as fraudulent or not, it will be determined to be fraudulent with your verification procedure.
8:24
SPEAKER_01: That's a very different fundamental approach.
8:27
SPEAKER_01: Imagine the greatest fission scheme you've ever seen.
8:40
SPEAKER_01: But you have a company policy that says all financial instructions cannot be changed based solely upon an email.
8:46
SPEAKER_01: So suddenly it doesn't matter anymore.
8:47
SPEAKER_01: Why?
8:48
SPEAKER_01: Because the employee doesn't have to determine whether it's fraudulent.
8:52
SPEAKER_01: Our procedures already determine what happens next.
8:55
SPEAKER_01: We independently verify it.
8:57
SPEAKER_01: That's the difference between fraud detection and fraud-resistant design.
9:00
SPEAKER_01: And that's what you help educate your client on.
9:02
SPEAKER_01: You put these policies and procedures in for your client and tell your client that if somebody changes financial instructions, you don't simply rely on the email.
9:09
SPEAKER_01: There's another process or procedure we'll go through.
9:12
SPEAKER_01: It doesn't matter anymore how convincing that email is.
9:16
SPEAKER_01: The system that you help put in place for your clients will be designed to protect your clients and thus you.
9:23
SPEAKER_01: I don't care whether it looks suspicious, the type of request that comes always requires verification.
9:29
SPEAKER_01: If your client knows that anytime somebody requests new closing instructions or say that there's a new place to wire funds, that automatically results in some type of verification process that you're involved in.
9:40
SPEAKER_01: That's how we stop the fraud.
9:42
SPEAKER_01: And that's where I think our industry has to go.
9:44
SPEAKER_01: Stop designing security around people's ability to recognize fraud because they're not going to be able to anymore.
9:49
SPEAKER_01: AI is going to be too good.
9:51
SPEAKER_01: We need to start designing business procedures and policies to catch the fraud for them.
9:56
SPEAKER_01: Make it easier.
9:57
SPEAKER_01: Don't rely on your client's ability to recognize that some email they got saying that we have 30 minutes to wire the funds and here's a new wiring instruction.
10:06
SPEAKER_01: Instead, put in place with your client a procedure that when they get these emails to call you and this is what we're going to do moving forward.
10:13
SPEAKER_01: Because here's the reality: you can't train your employees, you can't train your transaction coordinator, other real estate agents, your broker, the closing attorney, your buyer, your seller to recognize every future AI scam.
10:26
SPEAKER_01: They're just too good.
10:27
SPEAKER_01: They're getting so good at this.
10:29
SPEAKER_01: No one's going to be able to recognize all of these scams.
10:32
SPEAKER_01: The technology changes too quickly.
10:33
SPEAKER_01: But what we can do is create procedures that the criminals have to defeat.
10:39
SPEAKER_01: Here's another way to look at it.
10:41
SPEAKER_01: For years, security depended heavily on the person.
10:44
SPEAKER_01: Did our paralegal notice a strange email?
10:48
SPEAKER_01: Did the realtor notice the unusual request?
10:50
SPEAKER_01: Did the lender notice that something looked different?
10:53
SPEAKER_01: That was putting in a tremendous amount of responsibility on individual employees and parties to the transaction.
10:58
SPEAKER_01: We're putting it on the buyer-seller to recognize.
11:01
SPEAKER_01: People get busy.
11:02
SPEAKER_01: Got tons of emails coming in.
11:04
SPEAKER_01: Everybody's trying to get these closings completed.
11:06
SPEAKER_01: The closers and the lenders are dealing with tons of clients.
11:09
SPEAKER_01: They're getting interrupted constantly.
11:10
SPEAKER_01: They're trying to solve 10 problems all at one time.
11:13
SPEAKER_01: And then the emails arrive.
11:15
SPEAKER_01: Updated urgent wiring instructions, closing today.
11:18
SPEAKER_01: And that's exactly when human beings start making mistakes.
11:21
SPEAKER_01: Instead of expecting everyone to become an expert in artificial intelligence and fraud recognition, why don't we simply build businesses that they don't have to be?
11:31
SPEAKER_01: Let's create procedures.
11:33
SPEAKER_01: Let's train to those procedures.
11:35
SPEAKER_01: Let's follow those procedures and do not allow urgency to override it.
11:39
SPEAKER_01: That is exactly what the criminals always do.
11:42
SPEAKER_01: 30 minutes to get this wire out.
11:44
SPEAKER_01: You must do this now or the transaction is not going to occur.
11:47
SPEAKER_01: Urgency is their best friend because it doesn't allow your buyer or your seller the opportunity to independently verify the information.
11:55
SPEAKER_01: And so they act out of haste, they act in urgency because they're fearful they're going to lose that transaction and they hurriedly send the money to the wrong person.
12:04
SPEAKER_01: But if we do a better job creating the procedure for your client to follow, training your client on that procedure when these things happen, and making sure your clients follow these procedures, then urgency will no longer matter because we have a procedure in place to stop that.
12:18
SPEAKER_01: If your client is not a victim of fraud, you don't get sued as part of the reason they became a victim of fraud.
12:24
SPEAKER_01: Because when people lose money in real estate transactions, they're looking for a lifeline.
12:29
SPEAKER_01: And unfortunately, you, the real estate agent, is almost always going to be their lifeline.
12:34
SPEAKER_01: They're going to claim that you did not teach them, that you did not warn them.
12:37
SPEAKER_01: And the stats are staggering.
12:38
SPEAKER_01: It's like 67% of consumers believe it's somebody else's responsibility to identify fraud and to warn them of fraud.
12:46
SPEAKER_01: It's not their fault, it's your fault.
12:48
SPEAKER_01: So let's stop it being your fault.
12:51
SPEAKER_01: Because in this age of artificial intelligence, trust is no longer something that we can establish simply through recognition.
12:58
SPEAKER_01: Truth has to be established only through verification.
13:01
SPEAKER_01: And that brings us to our first practical change that I would make in every real estate transaction.
13:06
SPEAKER_01: Let's call it the transaction trust ceremony.
13:08
SPEAKER_01: Now it's a cheesy name I get it.
13:10
SPEAKER_01: I don't really like it either, but it's best I could come up with this morning.
13:12
SPEAKER_01: You can call it whatever you want to call it.
13:15
SPEAKER_01: The idea is incredibly simple.
13:18
SPEAKER_01: Establish the rules of trust before anybody needs them, before there's an urgency, before closing day, before somebody's saying we need you to wire$150,000 somewhere, before someone suddenly comes up and says the banking account information has changed.
13:33
SPEAKER_01: What is the client's verified telephone number?
13:36
SPEAKER_01: Have you verified what their actual email address is?
13:39
SPEAKER_01: How are you going to handle sensitive communications moving forward?
13:43
SPEAKER_01: Who is going to be authorized to provide them financial instructions?
13:46
SPEAKER_01: You're never going to provide them.
13:48
SPEAKER_01: Do they know that?
13:49
SPEAKER_01: Do they know they're only coming from the closing attorney?
13:51
SPEAKER_01: Do they know when you're using Blair Cater, they're only coming through a portal and will never come from an email?
13:57
SPEAKER_01: How are these instructions going to be delivered is very important to them to know immediately.
14:02
SPEAKER_01: How will changes be verified?
14:03
SPEAKER_01: What is the policies, procedures, and systems you have in place to make sure that your clients are protected?
14:09
SPEAKER_01: And perhaps most importantly, what is it that you will never do as a real estate agent?
14:13
SPEAKER_01: Imagine if every buyer you ever work with hears at the very beginning, during your initial meeting with them.
14:19
SPEAKER_01: I'm your realtor and I will never ever send you wiring instructions.
14:23
SPEAKER_01: Your lender will never send you wiring instructions.
14:25
SPEAKER_01: Wiring instructions will only come from your closing attorney, Blair Cato, and they'll only come through a portal, which you'll have to get a password to sign on to.
14:32
SPEAKER_01: If you receive any other types of wiring instructions that appear to come from a real estate agent, me, the lender, or any other way from the attorney, do not send money.
14:42
SPEAKER_01: Or imagine if you were to say our law firm that I use for closing is Blair Cato.
14:45
SPEAKER_01: They have a portal.
14:46
SPEAKER_01: They never change wiring instructions based on an email.
14:50
SPEAKER_01: If you ever get an email, you need to call me.
14:52
SPEAKER_01: See, here's the thing is you've established these rules before the criminal created the sense of urgency, the emergency that they've created.
14:59
SPEAKER_01: And that's important because criminals love to use urgency.
15:03
SPEAKER_01: We need this immediately.
15:04
SPEAKER_01: The closing is going to get delayed unless you send the money now.
15:08
SPEAKER_01: The accounts change.
15:10
SPEAKER_01: We need you to send the money now in 30 minutes.
15:12
SPEAKER_01: That's how they get people to fall for it.
15:14
SPEAKER_01: Think about the way that most real estate transactions currently begin.
15:18
SPEAKER_01: Everybody gets introduced, the realtor sends a contract, the lender gets copied in that email, probably the closing attorney as well.
15:23
SPEAKER_01: The buyer gets a portal link, seller gets some paperwork, and suddenly there's probably 10 or 15 people that are communicating about one transaction.
15:31
SPEAKER_01: But no one ever has stopped along the way and says, here are the rules for how we're going to communicate about sensitive information, including your financial information.
15:39
SPEAKER_01: And see, real estate is uniquely vulnerable because our legitimate transactions are already filled with urgency.
15:48
SPEAKER_01: You need to establish the procedure first.
15:51
SPEAKER_01: Establish the rules before the criminal creates that emergency.
15:54
SPEAKER_01: I keep saying that over and over again because when the emergency happens, nobody needs to be improvising.
16:01
SPEAKER_01: Everybody needs to be following very simple rules.
16:04
SPEAKER_01: I want the client to say, I understand that it's urgent, but there's a procedure that our real estate agent, our closing attorney, put in place for us, and we're going to follow that.
16:13
SPEAKER_01: That's a completely different mindset.
16:15
SPEAKER_01: And there's another benefit to doing this at the beginning of the transaction because what you're doing is you're educating the consumers.
16:21
SPEAKER_01: Most buyers and sellers don't understand how sophisticated these scams have become because of AI.
16:27
SPEAKER_01: I want you to be able to give them three or four simple rules that they can remember.
16:31
SPEAKER_01: Something like number one, never send money based solely on an email.
16:34
SPEAKER_01: Number two, never trust a change in wiring instructions without independent verification.
16:39
SPEAKER_01: Number three, never verify suspicious instructions using the contact information that's contained in the suspicious email.
16:46
SPEAKER_01: It's going to be fake as well.
16:48
SPEAKER_01: And number four, if anything feels unusual, you need to stop and you need to call me your real estate agent.
16:53
SPEAKER_01: That's what I'm here for.
16:53
SPEAKER_01: It's simple, it's memorable, it's repeatable.
16:56
SPEAKER_01: And here's a larger point.
16:58
SPEAKER_01: We're establishing a chain of trust before anyone can try to break it.
17:02
SPEAKER_01: That's what I mean by the transaction trust ceremony.
17:05
SPEAKER_01: Now it doesn't have to be complicated.
17:07
SPEAKER_01: It needs to be part of your intake process.
17:10
SPEAKER_01: It could be a page that your buyer reviews with you and sign, but I think we're rapidly approaching the point where every real estate professional needs to establish communication and verification rules at the beginning of the client relationship.
17:22
SPEAKER_01: Because once artificial intelligence can convincingly imitate you and anybody else involved in the transaction, well, all hell's broken loose, right?
17:31
SPEAKER_01: Next, I think here's something incredibly simple you could do.
17:35
SPEAKER_01: Create a private transaction verification phrase.
17:38
SPEAKER_01: Something random, not the property address, not your client's birthday, not your dog's name that they can find all over your Instagram page.
17:46
SPEAKER_01: Something that's not easily discoverable online.
17:51
SPEAKER_01: Then imagine someone calls the buyer, they sound exactly like you, saying there's an issue with the attorney's trust account, and you're apparently saying that there's an issue with the attorney's escrow account, and they need you to send the money somewhere different.
18:03
SPEAKER_01: I'm gonna send you an email with the new wiring instructions.
18:06
SPEAKER_01: But now the buyer responds differently.
18:08
SPEAKER_01: Instead of saying, okay, I'll take care of it, they say, what's our transaction verification phrase?
18:13
SPEAKER_01: Could be Disney, could be anything, could be Gamecock football, I don't know, whatever you want to make it.
18:19
SPEAKER_01: But that catchphrase creates a hurdle.
18:22
SPEAKER_01: And here's what I like about it it changes the mindset.
18:24
SPEAKER_01: The clients no longer think, well, that sounds like Gary, so it must be Gary.
18:27
SPEAKER_01: Instead, that sounds like Gary, but I still need to verify it.
18:30
SPEAKER_01: That's the habit we want out of our clients.
18:33
SPEAKER_01: Recognition should trigger the need for verification, not replace it.
18:37
SPEAKER_01: Now, is a passphrase or a catchphrase perfect security?
18:40
SPEAKER_01: Absolutely not.
18:41
SPEAKER_01: I wouldn't rely on it solely alone for high-risk financial transactions.
18:45
SPEAKER_01: It's simply another layer, and that's the point.
18:47
SPEAKER_01: A criminal might reproduce your voice, but it doesn't necessarily mean that the criminal possesses the private security code that you're going to establish separately.
18:56
SPEAKER_01: More importantly, it teaches the client a habit.
18:58
SPEAKER_01: Recognition triggers verification.
19:01
SPEAKER_01: Recognition doesn't replace verification.
19:03
SPEAKER_01: And you know what it also shows?
19:05
SPEAKER_01: It shows you care.
19:06
SPEAKER_01: It shows you're trying and you're doing everything in your power to protect your client.
19:10
SPEAKER_01: You care about your client and their financial well-being.
19:12
SPEAKER_01: Next we have the two-channel rule.
19:14
SPEAKER_01: If you remember only one operational rule for this entire episode, I think you should remember this.
19:20
SPEAKER_01: Money moves equal two channels.
19:22
SPEAKER_01: If money is moving, the wire instructions are changing, if seller proceeds changing, where they're going, if a payoff information is changing, if something's unusual about a request for disbursement, verify through a second independent established channel.
19:38
SPEAKER_01: An independent here is the key word.
19:40
SPEAKER_01: Suppose you have an email that says we've changed our bank account.
19:42
SPEAKER_01: Here's the new instructions, call this number if we have questions.
19:45
SPEAKER_01: All right, the email is the first channel.
19:47
SPEAKER_01: Now there needs to be a second channel.
19:49
SPEAKER_01: Don't call the number in the email because I can guarantee you if the email is fraudulent, the telephone number is also fraudulent.
19:56
SPEAKER_01: So instead of calling the law firm, you're actually going to be calling the fraudster who's going to say they work at the law firm and the information's correct.
20:01
SPEAKER_01: What you need to do is already have that number established in your system as part of your fraud prevention.
20:07
SPEAKER_01: When you're sending the contract to Blair Cato, you're letting your client know Blair Cato's telephone number.
20:13
SPEAKER_01: Use a number that's established during your independent initial verification.
20:17
SPEAKER_01: Or use the trusted secure portal.
20:19
SPEAKER_01: Step outside the communication that created the risk.
20:22
SPEAKER_01: If you're trying to verify within the communication that created the risk, you're just going to get scammed.
20:26
SPEAKER_01: Remember this two emails aren't two channels.
20:29
SPEAKER_01: Replying simply to that suspicious email is an independent verification because the person who gets the emails is the person who's committing the fraud and they're simply going to respond.
20:37
SPEAKER_01: Don't call the number in the suspicious email.
20:40
SPEAKER_01: Use independent verification.
20:41
SPEAKER_01: The entire point here is to force the person requesting the change to prove themselves somewhere else.
20:46
SPEAKER_01: Now let's make the rule even simpler.
20:48
SPEAKER_01: Consider adopting a policy for yourself, your brokerage, your team, and also reminding your clients that financial instructions cannot be changed solely by email.
20:59
SPEAKER_01: That doesn't mean financial information can't change at a law firm, of course it can.
21:03
SPEAKER_01: But the policy simply says a change triggers verification.
21:07
SPEAKER_01: And that's very powerful because it removes judgment from the client, from the real estate agent, from the brokerage firm.
21:13
SPEAKER_01: The client doesn't have to decide, does this look suspicious anymore?
21:16
SPEAKER_01: The policy has already been put in place and told to the client.
21:19
SPEAKER_01: It also gives your client something very incredibly valuable.
21:23
SPEAKER_01: The permission structure to say no.
21:26
SPEAKER_01: I'm happy to wire to a different account, but my real estate agent's policy requires me to independently verify.
21:32
SPEAKER_01: You're not accusing the person of fraud.
21:34
SPEAKER_01: You're not saying I don't trust you.
21:35
SPEAKER_01: You're saying here's how I'm going to protect my money.
21:38
SPEAKER_01: And I think this is one of the most underrated parts of fraud prevention.
21:42
SPEAKER_01: Your client needs to be given permission by you to slow things down to verify.
21:48
SPEAKER_01: When you're having your initial meetings, you need to be telling your clients it's very, very unlikely and unusual for them to be receiving an email or a telephone call saying that wiring instructions change.
22:00
SPEAKER_01: They could, it could happen, but it's extremely, extremely rare.
22:04
SPEAKER_01: So anytime somebody ever calls and says or sends you an email and says that wiring instructions have changed, that's an automatic red flag.
22:12
SPEAKER_01: It's an automatic stop.
22:14
SPEAKER_01: We are not moving forward.
22:15
SPEAKER_01: That means you say no and you're contacting the agent, you're contacting the attorney's office, and we're going to get that second identification from that second channel.
22:24
SPEAKER_01: When people hear cybersecurity, most of the things that go through their mind are firewalls, antivirus encryption, passwords, things of that matter.
22:30
SPEAKER_01: But criminals aren't attacking those anymore.
22:33
SPEAKER_01: What they're attacking is the person.
22:34
SPEAKER_01: Why break through this powerful firewall when all you have to do is convince the client to open the door?
22:40
SPEAKER_01: It's social engineering.
22:41
SPEAKER_01: And the weapons are easy.
22:43
SPEAKER_01: Urgency, authority, fear, confusion, familiarity.
22:46
SPEAKER_01: Hey, this is Gary.
22:47
SPEAKER_01: I need you to do this immediately.
22:49
SPEAKER_01: The closing is going to fail if you don't do this now.
22:51
SPEAKER_01: Don't call me.
22:52
SPEAKER_01: I'm in a closing.
22:52
SPEAKER_01: You can't get me.
22:53
SPEAKER_01: Artificial intelligence can make those messages seem very believable.
22:57
SPEAKER_01: So security now isn't just an IT issue, it's a culture issue.
23:00
SPEAKER_01: You need to tell your clients and your transaction coordinators that no one's going to get in trouble for stopping a transaction because something doesn't feel right.
23:08
SPEAKER_01: If your TC delays having the client send a wire out because they need to verify something, that's good.
23:14
SPEAKER_01: If the agent tells the buyer not to send the money until they speak to the closing attorney, that's also good.
23:19
SPEAKER_01: We want the receptionists at our office to feel empowered.
23:22
SPEAKER_01: I want my paralegals to feel empowered.
23:24
SPEAKER_01: I want your transaction coordinator to feel empowered.
23:27
SPEAKER_01: But most importantly, we need your clients to feel empowered to say no.
23:30
SPEAKER_01: Anyone in this transaction should have the ability to stop and say, I want to verify this.
23:35
SPEAKER_01: And the response from everyone should be, good job.
23:38
SPEAKER_01: Not why are you slowing this down?
23:40
SPEAKER_01: Just send the money.
23:41
SPEAKER_01: Because one 10-minute delay could easily prevent a six-figure loss, which means you are going to stay out of a lawsuit.
23:47
SPEAKER_01: That's not inefficiency.
23:48
SPEAKER_01: That's not, that's simply risk management.
23:50
SPEAKER_01: You need to train your clients, your transaction coordinators, just as we've trained our employees with these scenarios.
23:56
SPEAKER_01: You need to start thinking, what would you do if somebody tried to say their bank account changed and they need you to wire to different accounts?
24:04
SPEAKER_01: What happens if the lender sent an email about new payoff instructions?
24:08
SPEAKER_01: What happens if your broker tried to say, here's our new wiring instructions for your commissions?
24:13
SPEAKER_01: What are you doing?
24:14
SPEAKER_01: Are you simply taking that email and giving it to the closing attorney, or are you actually verifying that with the broker?
24:20
SPEAKER_01: We need to build these habits before these emergencies happen.
24:23
SPEAKER_01: I also want you to think about your identity for a second.
24:25
SPEAKER_01: It's no longer just your social security number.
24:28
SPEAKER_01: It's your email, your phone number, your voice, your photographs, your social media videos, your electronic signature, your calendars, your contacts, your cloud storage.
24:36
SPEAKER_01: All of that creates your digital identity.
24:38
SPEAKER_01: And if you're a realtor or a real estate agent or a lender or an attorney, I can guarantee you you've produced a lot of online content.
24:46
SPEAKER_01: Your voice and your face are already publicly available.
24:49
SPEAKER_01: And that doesn't mean you need to stop marketing, but what it does mean is you need to protect the accounts criminals can use to study your business.
24:56
SPEAKER_01: Use unique passwords, use your password manager, use multi-factor authentication, review your email forwarding rules, review account recovery methods.
25:05
SPEAKER_01: Anytime you have somebody quit working with you, cut off their access to their privileges.
25:10
SPEAKER_01: Because a criminal inside your email account is not going to immediately use anything.
25:15
SPEAKER_01: They're going to simply watch, they're going to learn who's got money on the line, who your clients are, when your closing is going to occur, and they're going to learn how you write.
25:22
SPEAKER_01: And that's where the artificial intelligence is going to be very valuable for them because they're going to learn how to be you.
25:28
SPEAKER_01: Now let's put all this together.
25:29
SPEAKER_01: I call this the zero trust closing.
25:31
SPEAKER_01: That doesn't mean we don't trust our clients.
25:34
SPEAKER_01: It means no single piece of information authorizes a high-risk action.
25:39
SPEAKER_01: And here's an easy framework to remember this by.
25:41
SPEAKER_01: It's called STOP.
25:42
SPEAKER_01: Stop.
25:43
SPEAKER_01: Yes, slow down.
25:45
SPEAKER_01: Fraud thrives on urgency.
25:47
SPEAKER_01: Empower your clients to say no, to slow down, to stop.
25:52
SPEAKER_01: T, two-channel verification.
25:55
SPEAKER_01: If money is moving or instructions are changing, your client needs to use independently established second channels to verify that information.
26:04
SPEAKER_01: Pick up the phone, call the closing attorney's office, use the telephone number, not in the email they just received, but the one that they know from the internet, or better yet, from the one that you provided them when you introduced them to the Blair Cato.
26:16
SPEAKER_01: Oh, obtain independent confirmation.
26:19
SPEAKER_01: Don't verify using information supplied by the suspicious request.
26:23
SPEAKER_01: Anything in the email has to be looked at as possibly fraudulent.
26:27
SPEAKER_01: And then P, preserve the verification.
26:29
SPEAKER_01: Document who verified it, when they verified it, and how.
26:32
SPEAKER_01: Because if anything ever goes wrong, you need to show that you, the real estate agent, did what you were supposed to.
26:37
SPEAKER_01: So slow down two channels, obtain independent confirmation, and preserve the verification.
26:43
SPEAKER_01: STOP.
26:44
SPEAKER_01: That's a procedure that people can remember.
26:47
SPEAKER_01: Criminals hate procedures because procedures remove the two things they depend on most: emotion, improvisation.
26:54
SPEAKER_01: Now let's get incredibly practical as we finish here today.
26:57
SPEAKER_01: If you're a real estate agent listening to this, there's five things that I would do tomorrow.
27:01
SPEAKER_01: Number one, turn on multi-factor authentication in your emails, your social media, your cloud storage, your CRM.
27:07
SPEAKER_01: Turn it on everywhere.
27:08
SPEAKER_01: Number two, tell every buyer, I will never send you wiring instructions.
27:13
SPEAKER_01: I won't send them to you, your lender won't send them to you.
27:16
SPEAKER_01: They only come from the closing attorney.
27:17
SPEAKER_01: And if you're using Blair Cato as you should be, they're going to come through a portal.
27:21
SPEAKER_01: Number three, warn clients that digital communications can be manipulated.
27:25
SPEAKER_01: You're not here to frighten them, you're here to educate them that wire fraud is legit.
27:30
SPEAKER_01: AI fraud is legit.
27:31
SPEAKER_01: People are going to try to send you fake instructions, tell you to change things.
27:35
SPEAKER_01: But we're going to establish procedures so that doesn't happen.
27:38
SPEAKER_01: Number four, establish the closing attorney, verified contact information early.
27:43
SPEAKER_01: Don't wait until the closing date.
27:45
SPEAKER_01: Make sure they have that information early.
27:47
SPEAKER_01: And number five, if anything involving money ever changes, stop, call, and verify.
27:54
SPEAKER_01: And brokers, if I were y'all, I'd put this into your policies.
27:57
SPEAKER_01: Start having policies.
27:58
SPEAKER_01: I think you need to meet with your agents.
28:00
SPEAKER_01: Don't rely on them hearing this wonderful podcast.
28:02
SPEAKER_01: You know, number one podcast in South Carolina for real estate.
28:05
SPEAKER_01: But you need to be training your agents.
28:06
SPEAKER_01: You need to role-play this.
28:07
SPEAKER_01: You need to put some put it in your onboarding.
28:09
SPEAKER_01: You need to be talking about this at your sales meeting.
28:12
SPEAKER_01: Make fraud prevention part of your culture because we do know that every time there is a fraud where somebody loses money in a real estate transaction, they immediately sue the real estate agents involved, blaming you.
28:23
SPEAKER_01: The last thing I think we all need to look at is one additional concept, which is risk tier transactions.
28:28
SPEAKER_01: Not every closing presents the same risk.
28:31
SPEAKER_01: Certain facts could trigger enhanced verifications, even without crazy emails.
28:36
SPEAKER_01: Vacant land, free and clear property, remote sellers, somebody rushing to do a cash transaction, last-minute banking changes, unusual power of attorneys, inconsistent contact information, request to send proceeds somewhere that seems unexpected.
28:51
SPEAKER_01: None of these automatically involve fraud, but they also don't need an email to already trigger the red flags.
28:56
SPEAKER_01: Remember, this simply means we need to have a closer look.
28:59
SPEAKER_01: Maybe that creates some type of escalation procedure at your real estate brokerage.
29:03
SPEAKER_01: One red flag, additional review.
29:05
SPEAKER_01: Multiple red flags, maybe it's time to bring in the broker in charge and have them review or call the closing attorney.
29:11
SPEAKER_01: The identity doesn't make sense, an immediate pause.
29:14
SPEAKER_01: Banking information changes at the last minute, that's an automatic stop.
29:17
SPEAKER_01: Someone suddenly refuses to communicate through their previously established channels, that's automatically a stop.
29:23
SPEAKER_01: Fraud prevention shouldn't exist only inside your most experienced agent's hands.
29:29
SPEAKER_01: Build the procedure, document the procedure, train on the procedure because systems have to survive people.
29:36
SPEAKER_01: People are fallible.
29:38
SPEAKER_01: They make mistakes.
29:39
SPEAKER_01: Let me leave you with this.
29:41
SPEAKER_01: Artificial intelligence is going to make real estate better in a lot of ways.
29:44
SPEAKER_01: It already has made marketing, communication, research, contract review, scheduling, transaction management, all of that so much easier.
29:52
SPEAKER_01: But AI is also going to make deception cheaper, faster, and a lot more convincing.
29:57
SPEAKER_01: And I think that's going to make something else incredibly valuable.
30:01
SPEAKER_01: Trust.
30:02
SPEAKER_01: Imagine the world consumers are entering.
30:05
SPEAKER_01: Emails can be fabricated, voices can be cloned, photographs can be generated, documents can be manipulated, video doesn't even approve identity anymore.
30:14
SPEAKER_01: In that world, the winning real estate companies may not necessarily be the companies using the most artificial intelligence.
30:21
SPEAKER_01: They may be the companies that can look the consumer in the eye and say, we have the systems in place and designed to protect you and your money.
30:30
SPEAKER_01: So don't ask, how do we recognize every AI scam?
30:33
SPEAKER_01: You'll never keep up.
30:34
SPEAKER_01: You're not going to be able to do it.
30:36
SPEAKER_01: But ask this if the most convincing fake in the world showed up tomorrow, would our procedures still protect the client?
30:43
SPEAKER_01: If the answer is no or I don't know, that's where you need to start.
30:47
SPEAKER_01: Remember, STOP, slow down, two-channel verification, obtain independent confirmation, preserve the verification.
30:55
SPEAKER_01: And above everything else, if money moves, that's two channels.
30:59
SPEAKER_01: If money is moving, if instructions are changing, if someone's identity suddenly matters, stop, verify, document.
31:07
SPEAKER_01: Artificial intelligence may be changing the criminal playbook, but we don't have to keep defending ourselves with yesterday's outdated rules.
31:14
SPEAKER_01: All right, I hope everybody enjoyed this week's edition Dirt.
31:17
SPEAKER_01: I'll be back again next week with another episode.
31:19
SPEAKER_01: Please like us, share us, and subscribe.
31:21
SPEAKER_01: Y'all have a great weekend.