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Between debates on hate speech and three-way agreements at its midyear conference, the National Association of Realtors issued a dire warning about the rapid rise of cryptocurrency scams targeting real estate agents.
“Cybercrime — particularly wire fraud — continues to be a top concern in the real estate industry,” the Association’s broker risk reduction homepage read. “The U.S. Secret Service has informed NAR about a new cryptocurrency scam targeting real estate professionals, some of whom have lost a significant amount of money.”
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In the scam, con artists reach out to real estate agents as an all-cash homebuyer. Con artists may use social media or emails to strike up a conversation, but the most common method is through a text directed to someone else about an important document or deal. When the agent texts back, usually to let the scammer know they’ve texted the wrong number, they’ll strike up a conversation and begin the con.
After building rapport, the con artist explains how they made their fortune through cryptocurrency and encourages the agent to create an account on a legitimate platform, like Coinbase, and convert a small amount of money — $1,000 or less — into cryptocurrency. From there, they direct the agent to download another investment app through a fake App Store or Google Play link. When the link doesn’t work, they’ll send them another link to their fraudulent investment site.
The agent follows through, gets a robust return, and then, at the behest of the con artist, withdraws their funds. The con artist then asks the agent to keep making larger investments through the fraudulent site, which shows false metrics on how much their investment is growing. However, when the agent is ready to make another withdrawal, the con artist shuts down the site, takes their money and disappears.
Zack Schuler | Credit: LinkedIn
NINJIO Founder and CEO Zack Schuler said this tactic, which is known as the Pig Butchering Scam, has been around for several years and coincides with the rise in cryptocurrency. The scam often happens over a few months, with con artists leaning on psychological tactics, artificial intelligence and deep-fake technology to rope in victims.
“Know that even if you meet up with somebody on video, on FaceTime, on whatever, if they look real and they sound real, they aren’t necessarily real,” Schuler, an Inman contributor, said. “It could be somebody in Eastern Europe, it could be somebody in Cambodia that is using AI to make themselves look the same race, gender, etc., to make themselves seem more relatable. They can even disguise their voice. They can do everything.”
“So don’t trust video anymore,” he added. “AI has figured that out.”
Schuler said AI has helped con artists circumvent typical online vetting tactics, so the key way to mitigate risk is by doing in-person investment meetings only.
“Before you do anything with anybody, get together in person and verify that that person is real,” he said. “And remember, if it’s too good to be true, then it usually is.”
If you’ve been scammed, Schuler said the first step is reporting the incident to local law enforcement. From there, local law enforcement can escalate the incident to the local Federal Bureau of Investigation (FBI) field office, which can connect you with mental health or financial resources.
If you’re still in contact with the scammer, Schuler said it’s important to stay calm and not scare them away with demands to get your funds back. Instead, it’s best to keep the conversation going so authorities have a higher chance of locating the scammer and getting your funds back.
“For most people, once [the money] is gone, it’s gone,” he said, recounting the story of an agent who lost $1.8 million.
The FBI estimates victims lost $16.6 billion last year from cyber investment scams, including the Pig Butchering Scam. If you believe you’ve been scammed, contact the FBI Internet Crime Complaint Center (IC3).
