A Practical Look at the Legal Environment Behind
“Verify, Then Trust”
By: Elyce Schweitzer, Alliant National Regulatory Compliance Officer
Artificial intelligence has made fraud more convincing and more difficult to spot. As we explored in our earlier piece on deepfake-enabled fraud, today’s bad actors can impersonate real parties, voices, and documents with a level of sophistication that would have been unimaginable just a few years ago.
In response, lawmakers and regulators are strengthening the legal tools available to prosecutors, civil enforcers, and courts. These developments don’t rewrite core fraud principles, but they do change how those principles apply to real estate closings — and they reinforce the value of careful verification.
Understanding this evolving landscape helps explain why it’s so important to Verify, Then trust — every file, every party, every time.
Fraud and Impersonation: Statutory Tools That Matter
States are updating their criminal and civil fraud statutes to make it clearer that impersonation using modern technology is not a technical loophole but a prosecutable offense.
For example, in Texas, Senate Bill 1333 (effective September 1, 2025) amended Chapter 32 of the Texas Penal Code by adding Sections 32.56 and 32.57. Section 32.56 makes it an offense, with intent to enter or remain on real property, to knowingly present to another person a false, fraudulent, or fictitious document purporting to be a lease agreement, deed, or other instrument conveying real property or an interest in real property. Section 32.57 makes it a first-degree felony to knowingly list, advertise, sell, rent, or lease residential real property without legal title or authority.
In practice, these sections clarify that impersonation involving falsified property documents constitutes fraud, even when the deception relies on digital or AI-assisted tools. Notably for title agents, when such cases are investigated or litigated, the analysis may extend beyond the fraudulent act itself to examine how the transaction progressed, including what steps were taken to confirm identity and authority before reliance occurred.
The Role of Notarization and Remote Online Notarization
Notarization has become a critical built-in safety mechanism for property transactions. States that authorize Remote Online Notarization (RON) typically require defined identity-verification procedures, which may include multi-factor authentication, recorded sessions, and retained audit logs.
These requirements do more than check a box. They create layers of verification that are observable after the fact. When fraud does occur, prosecutors, judges, and civil litigants may scrutinize whether these verification layers were followed.
In other words, notarization statutes don’t replace professional diligence — but they codify expectations for how identity and intent should be confirmed and documented.
Expanding Definitions of Deceptive Communication
Other states have updated their fraud laws to explicitly cover realistic representations made with advanced technologies. New Jersey’s Statute § 2C:21-17.8, effective April 2, 2025, defines “deceptive audio or visual media” as the use of highly realistic representations of speech, conduct, or writing where the subject did not actually engage in that conduct. The statute criminalizes generating, soliciting, disclosing, or using deceptive audio or visual media for the purpose of attempting or furthering the commission of a crime or offense, or with knowledge it will be used for that purpose.
Florida’s Communications Fraud Act (Section 817.034 of the Florida Statutes) takes a broader approach by recognizing that sophisticated communications techniques, including those enabled by technology, play a central role in modern fraud schemes. The statute consolidates fraud and organized fraud offenses, aligns state law with federal mail and wire fraud precedents, and includes enhanced penalties for certain first-degree felony offenses. It also provides civil remedies related to identity misuse and sets limitation periods and tolling rules that account for defendants who are absent from the state or lack an ascertainable address.
These statutory definitions reinforce something title professionals already know from experience: fraud is not defined by medium but by intent and effect. A voice message, video call, or carefully worded email can be just as fraudulent as a forged signature on paper. What matters is whether it induces action based on false representations.
Federal Reporting and Awareness Efforts
At the federal level, activity has focused on understanding and reporting on the risks associated with AI technologies. For example, legislation passed in connection with the 2021 National Defense Authorization Act (NDAA) requires the Department of Homeland Security to produce annual reports on digital content forgery technology. Other laws direct federal agencies to study and develop standards for identifying outputs of generative adversarial networks — the core technology behind deepfakes.
For those of you who enjoy reading more technical material, the Science & Technology (S & T) Digital Forgeries Report for Fiscal Year 2024 Report to Congress is available for your enjoyment. A review of the report makes it clear that the technology and its potential for harm to our industry is complicated.
These federal efforts help catalog the risks and raise awareness across industries, but they do not change state criminal or civil liability in property transactions. Instead, they improve the information environment in which professionals and regulators operate.
What This Means for Title Professionals
When closings are reviewed after fraud occurs, the focus will likely shift to whether steps were taken to verify identity, authority, and intent, and whether those steps were reasonable under the circumstances. This reflects how fraud is often evaluated after the fact: technology may enable new methods of deception, but it does not change the underlying wisdom: Verify, Then Trust before acting.
The Bottom Line
Regulatory and statutory changes are not abstract developments. They reflect how lawmakers and enforcers are applying long-established fraud principles to modern threats.
Deepfakes and AI-enabled impersonation present real risks in real estate transactions. The truth is, when fraud is investigated or litigated, attention will likely shift beyond the technology itself to how the transaction unfolded, including whether identity and authority were meaningfully confirmed before reliance occurred.
For agents who incorporate verification as a routine part of their workflow, “Verify, Then Trust” functions as a practical risk-management framework. It aligns with the way fraud is examined after the fact and supports defensible decision-making when transactions are questioned. Applied consistently, this approach helps protect the transaction, the parties involved, and the professionals responsible for bringing the deal to completion.
