Homebuyers are perfect fraud targets. Here’s how to protect your info | Opinion

The chair of the National Association of Realtors' Safety Advisory Committee for 2024 warns prospective homebuyers to guard against identity theft.

You’ve saved up for years for a down payment on your dream home. You’ve taken all the right steps: researched neighborhoods, created your list of “must-haves,” and enlisted the help of a real estate agent to guide you through the process.

But just as you’re getting ready to make an offer, you make a shocking discovery. Your credit score has dropped precipitously — and taken with it your chances of securing a mortgage.

In recent years, thousands of prospective homebuyers have become victims of identity theft or had their personal data stolen. The Federal Trade Commission reported 1.1 million cases of identity theft and more than 2.3 million cases of fraud in 2022 alone.

When personal data falls into the wrong hands, it can be used to open new lines of credit in a victim’s name and run up large bills that go unpaid. These new credit inquiries and outstanding debts can tarnish even the most pristine credit reports. Fully restoring credit can take seven years or more.

In 2018, Marriott suffered a data breach that exposed the sensitive data of over half a billion customers, including home addresses and passport numbers. A few years later, cybercriminals breached LinkedIn’s database, exposing the personal information of 700 million users.

Real estate fraud is also on the rise. Last year, real estate and rental fraud cost victims over $396 million — an 86% increase from 2020. From a fraudster’s perspective, the real estate industry is a natural target. Homebuyers and renters typically share everything from their Social Security number to their mother’s maiden name when shopping for housing.

The good news is that there are a number of strategies individuals can use to keep their personal data from falling into the wrong hands.

Something as simple as swapping an eight-character password for a common phrase — up to 100 characters — can be easier for you to remember while making your data more challenging for cyber criminals to crack.

In addition, and perhaps most consequentially for home buyers and sellers, several states have enacted laws to protect consumer data that is held, processed and controlled by businesses.

At least 11 states have enacted a comprehensive data privacy law. These laws generally address a variety of consumer rights and business obligations, including a consumer’s right to correct or delete personal information held by a business, to opt out of the sale of personal information to third parties, and to request the deletion of their personal data. Such laws also prohibit businesses from discriminating against a consumer who decides to exercise these rights.

Several states have enacted other laws that require businesses to either dispose of personal information or provide notification of security breaches involving personal information.

Another best practice for homebuyers and sellers is to review the privacy policies of the brokerages they use. Generally, these policies will address the collection, use and sharing of personal information; types of personal information that can be collected, used and shared; and rights to access, change or delete personal information. Many current privacy policies also have subheadings that make content easier for consumers to navigate and digest.

The National Association of Realtors offers a wealth of resources on data security and privacy, including its Data Security and Privacy Toolkit, which can equip real estate professionals with the latest information on current laws as well as policies and best practices for securing consumer data.

Finally, if you believe you or a loved one has been the victim of fraud or identity theft, don’t wait to act. File a report with the Federal Trade Commission through IdentityTheft.gov and ask the major credit reporting agencies to freeze your accounts and issue a fraud alert. In addition, contact the fraud department of any business or organization where you maintain financial accounts, especially your bank.

Cybercrime is a constant threat in the digital age. But a few simple, proactive steps can go a long way toward keeping your data safe.

Lamont Breland is principal broker of The Breland Group in Louisville, Ky., and 2024 chair of the National Association of Realtors’ Safety Advisory Committee.