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Thirty some years ago when my older brother was climbing the corporate ladder in a Big Four accounting firm, he was relocated to the company’s New York City headquarters.

A little green in the ways of the city, he got a telephone call one Sunday afternoon from a man claiming to be an executive with a big client of the firm. He said that he had traveled to New York City from London, lost his wallet and asked my brother to help him out with travel expenses.

The sly hustler had vital information about the accounting firm, dropping the name of my brother’s boss and other pertinent company details.

Consider this was pre-cellphones and pre-internet.

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The plan was for my brother to meet him in the basement level of the fancy Waldorf Astoria Hotel on Park Ave. A company man, he was suspicious but torn by a sense of duty to help a possible client. When he pushed back, the guy guilted him about shunning a big client.

Dutiful and unable to reach his boss, my brother hopped a cab to the hotel and took an elevator to the B level, only to be greeted by a swarm of New York City police officers. The first thing he heard when he exited the elevator was “another sucker.”

A copper told my brother that he was lucky because the culprit had fleeced a number of other gullible corporate types before he slipped through their fingers.

The shady grifter unearthed enough information from corporate annual reports and the phonebook to fool a few young upstarts and make off with their money.

The police officer asked him why he hadn’t verified the “client’s” identity.

How could he have, exactly?

Three decades later, we’re getting closer to the answers — however risky and invasive they may be.

New authentication tools will begin to protect people (like agents showing houses to strangers). Plus, thanks to digital verification, real estate transactions will close in a blink of the eye and make the homebuying and selling process as certain and fast as buying a jumbo freezer on Amazon.

Have you signed up for the private airport security system Clear? Scan your boarding pass, put your finger tips on a scanner, take a biometrics mug shot and (bingo!) you sidestep the lines and are on your way to your gate.

Clear enrollment page

If we trust such a system to protect us from terrorists, then we can count on it to make an express home sale.

That’s stress-free security. How about stress-free home buying?

Imagine an online lead using iPhone facial recognition before meeting you at a listing. Imagine a fingerprint securing an escrow payment, verifying a house showing or approving a smart contract.

Real estate startup Trust Stamp will wipe out wire fraud in emails by using facial biometrics like Clear to prove the identity of an email sender. Its next product will provide identity verification when an agent meets up with a new prospect.

Everything from home showings, contracts, loan approvals and closings will be made simpler, safer and faster because of identity verification. Leads will not be a mystery, charlatan buyers will be exposed, open house stalkers will be busted and predators will be scared off.

Massive databases on home shoppers, sellers, agents and properties are being integrated as we speak. These data sets, facilitated by blockchain in a shared ledger, will make instant authentication even more sophisticated, reliable and safe. Data will be organized and protected more securely without the siloed database, top-down control of too-big-to-fail banks and credit houses like Equifax.

Dating back to 1862 when the Homestead Act was passed, real estate has been littered with scandals that could have been avoided with proper authentication. Accelerating the settlement of the American West, the landmark law granted families 160 acres of public land for a tiny fee and for living on the property for five years.

Five hundred million acres were settled, but only 80 million went to actual homestead families, while the bulk went to speculators, miners, lumber companies and railroads.

How did they get away with it? Graft and bribes? Sure, but they also faked the true ownership chain of the property, putting claims under straw buyers without proof they actually were meeting Homestead Act requirements. The government had flimsy tools to verify who was who.

That first real estate scandal was followed by many more, including the housing market collapse in the 1930s, the mortgage redlining disgrace of the 1960s and 1970s, the savings and loan debacle, HUD scandals in the 1980s and the subprime meltdown 20 years later

Most of these messes involve loans, subsidies, funds or ownership claims going to the wrong people — and could have been avoided if authentication systems were in place.

Ironically, those scandals precipitated other crazy-making security steps like the requirement that people who secure a federally backed mortgage provide their thumbprint. These arcane steps did nothing to prevent fraud because the paper documents were tucked away in file drawers.

Current systems catch people after the fact but can’t stop scams before they happen. That is where authentication in the digital age comes in.

Consider the sub-prime crisis in the mid-2000s, which could have been avoided by authenticating borrowers. Their true financial profile was disguised by shaky mortgage brokers and misrepresentations by borrowers who made claims about income and assets. The paperwork was processed, faulty claims were missed and the aggregate debt load of unqualified borrowers and risky loans conspired to help bring down the global economy.

Bots identify crooks and scrub errors and misrepresentations better than humans.

Finally, too many real estate agents have been raped, injured or even killed because prospects are not properly authenticated at open houses and showings.

I think ninety percent of that risk will be thwarted with simple authentication tools. It’s about time.

Email Brad Inman

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