You’ve probably seen the advertisement about home title fraud and asked yourself: “How common is home title theft anyway?” The truth isn’t as dire as these insurance companies want you to believe, but the risk does exist. If you want a better explanation backed by actual FBI data, read on.
When selling insurance – or any kind of protective service – fear is the most common marketing strategy. Title lock companies know that the only way you’ll spend money protecting your title is when they can get you afraid that might actually lose it.
But is that really true?
To answer that question, it’s good to first understand what is home title theft, and then look closely at the numbers.
Putting Home Title Fraud in Perspective
In the most recent FBI Internet Crime Report, which categorized different kinds of internet fraud, real estate and rental schemes made the list, but it wasn’t nearly as high as other risks people face such as confidence fraud, email compromise, investment scams and data breaches.
But when you see $350 MILLION as the price tag for real estate fraud, you can’t ignore that.
But there are two important details to consider within this number:
- Home Title Fraud is only one kind of real estate fraud: The numbers that the FBI reports include so many different kinds of real estate fraud and home title scams are a tiny percentage of that.
- Home Title Fraud is DOWN year over year: As you can see in the graphic below, the number of home title fraud cases has gone down by almost 20% year over year.
Does home title fraud exist? Absolutely, it does.
But are you at high risk? Absolutely not.
Home title theft is not very common.
Home Title theft is not very common in the US, nor around the world, and it continues to decrease every year. This is not because insurance exists, but rather because banks, realtors and other entities are becoming wise to this scam and easily preventing it before it starts.
So is something like home title lock necessary? Honestly, don’t feel like you need to go out and purchase unnecessary home title insurance. The chances are extremely low that you will be a victim, and if you’re still worried you can always ask to put an email alert with your local county to let you know of any fishy changes to title documents.
