What Every 1031 Investor Should Know about Real Estate Fraud and Cyber Risk
Fraud involving real estate monies continues to rise and 1031 Exchanges are increasingly being targeted. These are some of the high-risk areas:
Today’s Most Dangerous 1031 Threats:
- Cybercrime and wire fraud
- Real estate scams targeting exchange funds
- Hidden incentives and undisclosed conflicts of interest
- Underinsured/uninsured Qualified Intermediaries (QIs)
Real Estate & Cyber Fraud: The Growing Threat
Cyber and real estate fraudsters don’t just threaten email inboxes, they target wires, real estate closings, and Exchange funds. And this fraud is escalating at alarming rates:
- Wire fraud is soaring. The FBI’s Internet Crime Complaint Center (IC3) reported $16.6 billion in total internet-crime losses in 2024, with $2.77 billion linked to Business Email Compromise (BEC), the primary tactic for diverting wire transfers. (FBI ICE 2024 Annual Report)
- Real estate wire fraud losses have multiplied fifty-fold in less than a decade, soaring from under $9 million in 2015 to more than $446 million in recent years (ALTA, NAR, HousingWire referencing FBI/IC3 data)
- Nearly half of all real estate transactions show fraud attempts/indicators, with a median loss of $70,000 per case (United States Real Estate Investor)
- One in four consumers receives a fraudulent message during real estate closings, and nearly 5% fall victim (CertifID, 2024 Wire Fraud Report)
What to Ask When Choosing a QI
- What security controls are in place to prevent cyber and real estate fraud?
- Who has authority over my Exchange funds?
- Are referral fees being paid to my broker/real estate agent.
- Is the QI insured and bonded? What are the amounts of coverage?
- What secure processes are in place for your fund transfers?
- Read more questions to ask your QI here.
Why Bigger Really Is Safer
The 1031 Exchange industry is not regulated by the Federal government, which means that practically anyone can act as a QI. Some operate with no oversight and limited or no insurance. IPX1031 offers compliance oversight by internal and external auditors, and unmatched financial backing as part of Fidelity National Financial, a Fortune 500 company. Your Exchange funds are deposited in the nation’s largest banks and backed by the highest financial assurances in the industry.
1031 Experience Matters
Technology and insurance alone are not enough.1031 Exchanges require seasoned expertise and proven guidance. With IPX1031, you gain:
- Dedicated 1031 experts — attorneys, CPAs, and Certified Exchange Specialists® (CES®) on staff
- Extensive experience — professionals who have facilitated billions of dollars of transactions and thousands of Exchanges each month
- Industry leadership — a trusted track record backed by very high compliance and security standards
- Recognized excellence — consistently honored as the Best 1031 Exchange Company
Take Action: Protect Your Exchange in 2025
Given that 1 in 3 Americans have already lost money to fraud this year, don’t let cyber fraud or real estate scams put your Exchange and funds at risk. Choose a QI that is reputable, transparent, highly insured, cyber-secure and backed by a Fortune 500 company. Your financial plans deserve nothing less.
Your Risk is Real—Your Solution is IPX1031
With IPX1031, compliance and security come first. As a national leader in 1031 Exchange services, IPX1031 has the financial assurances, security and expertise essentials to protect your funds and provide answers and guidance throughout the exchange process. For more information or to discuss your specific 1031 tax deferred exchange situation, please contact us.
Read More
1031 Due Diligence – Questions to ask a QI
How Important is Your Qualified Intermediary?
Study: Most Americans Say Referral Fees and Revenue Sharing Are Unethical or Questionable
Safeguarding Your 1031 Exchange Transactions: Navigating Cyber Risks in Real Estate
1031 Cybercrime
Safety and Security for Investors
IPX1031 Knowledge Center
