Cyberfraud 101: Thwarting the Foe

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By Barbara Pronin

Words like ‘phishing,’ ‘hacking,’ and ‘cyberfraud,’ unheard of little more than a decade ago, are now well-established in our vocabularies. That’s because, in the Internet-connected world we live in, an average of more than 4,000 cyber-attacks are occurring every day. That’s more than 170 attacks every hour, or three attacks every minute* – and real estate-related cyberfraud is rapidly becoming one of our nation’s most worrisome issues.

Criminals are hacking into the email systems of agents, clients, title and escrow officers, and others involved in real estate transactions, and using the information learned from these attacks to dupe the innocent into wiring funds that could be lost to the victims forever.

The way it works is simple: a hacker breaches the email account of someone who is a party to a real estate transaction. The hacker then sends an email to the buyer, for example, pretending to be one of the parties involved in the closing process. The email says there has been a last-minute change and requests the buyer to wire down payment funds to a different account. But that account belongs to the hacker.

Title industry executives, the National Association of Realtors, and other real estate-related professionals have issued numerous alerts urging their members to be on guard against email and/or online fraud.

For maximum protection, start from the assumption that any email in your in-box could be a targeted attack from a criminal – and minimize the chance of anyone falling victim by practicing these prevention guidelines:

If you must send sensitive information via email, use encrypted email.
Never click on links in an unverified email. Doing so can make you vulnerable to attack.
Warn clients not to trust contact information in an unverified email because hackers can recreate legitimate-looking documents using their own telephone number. Before wiring any funds, the sender should call the intended recipient at a number they know is legitimate to verify the wiring instructions.
Trust your instincts when an email seems suspicious. Warn clients to refrain from taking any action requested by email until they verify that the communication is legitimate.
Clean out your email account often, and change your passwords regularly. Important emails may be saved in a secure location in your internal system or hard drive.
Use usernames or passwords that are not easy to guess.
Make sure to implement the most up-to-date firewall and anti-virus technologies available on your computer or device.

If you determine that money has been wired via false wiring instructions, immediately call any financial institution that could put a stop to the wire, and contact local police as well as the Internet Crimes Complaint Center of the Federal Bureau of Investigation (FBI).

*According to the 11th IBM Cost of Data Breach Study

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice. The material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy.

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