With the COVID-19 pandemic forcing the world to become more virtual, cybersecurity is more important than ever. By being informed and staying vigilant, real estate professionals can protect themselves and their clients from cybercrime. These five tips can help prevent cybercrime.
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With the pandemic forcing the world to become more virtual, cybersecurity is more important than ever before. According to the FBI, in 2019 nearly 12,000 victims suffered a total loss of $222 million in real estate transactions to cyber fraud, a 3% increase in victims and a 50% increase in monetary loss from the previous year. With so many more business transactions taking place virtually, these numbers are bound to continue to grow in 2020. In this Window to the Law video, you’ll learn how cybercriminals are taking advantage of the pandemic by developing new scams, and how you can protect yourself and your clients from becoming another cybercrime statistic.
Consider this story of a California buyer who nearly lost her $180,000 down payment. Here, the scammer hacked into the e-mail accounts of various professionals working on the closing, exposing sensitive information used by the hacker to mislead the buyer into believing that the terms of the transaction had changed. Exploiting the confusion surrounding the circumstances with the state’s pandemic shut-down orders and also knowing that the buyer was eager to buy the house, the scammer created a false sense of urgency to cause fear of losing the house and convinced the buyer that the down payment had to be paid by wire transfer instead of by a cashier’s check. Fortunately, the broker and buyer acted in time and were able to mitigate the loss to $2,000. Sadly, not everyone is this lucky, with stories like this becoming more prevalent.
Scammers are exploiting people’s interest in news about the pandemic, health and safety guidelines, government relief programs and stimulus checks, by pretending to be health organizations like the WHO or the CDC, governmental agencies like the SBA and IRS, and financial institutions. These criminals allege to have important information about the government health requirements and restrictions, and COVID-19 vaccines, and use tactics like business e-mail compromise, phishing, spoofing and malware to trick people into clicking on the false links or entering their account credentials, which provide criminals access to e-mail, financial accounts and other sensitive information. Once the scammers gain access, they will prey on consumers, like real estate brokers and consumers, and try to effectuate wire fraud, ransomware and other types of cyberfraud.
It’s important that brokers and agents are constantly on guard and monitoring business e-mail communications. In 2018, a broker in a Kansas federal case called Bain v. Platinum Realty claimed that a criminal had infiltrated e-mail exchanges between parties and sent fake wire instructions from her e-mail account which were used to defraud a buyer. The broker couldn’t prove that she had not sent the false instructions and she was held liable. This is a cautionary tale of where better e-mail monitoring could have prevented the cyberscam and saved the broker from liability.
Be vigilant about cybersecurity, and consider these five tips to guard yourself and your clients against cybercriminals:
- First, from the outset and throughout the relationship, constantly advise and remind your clients on how you will communicate with them, and to verify any and all information sent to them, especially as payments come due and as the closing date draws near.
- Next, familiarize yourself and educate your clients about the various pandemic related schemes criminals are using. Check out the FTC website which provides videos and robocall audio recordings about COVID-19 related scams that can be reviewed and shared so that you and your client can better know when being targeted.
- Third, know where to go for trustworthy information about the pandemic, and educate your clients not to rely on third-party e-mails or websites, and instead, visit authoritative websites, such as the CDC, SBA, or other governmental agencies directly.
- Fourth, diligently check your e-mail account for any suspicious activity. Make it a habit of checking your deleted e-mail folder and your mailbox settings. If you see any suspicious activity, such as automatic forwarding to an outside e-mail account, change your password immediately and contact your e-mail provider.
- Lastly, check out NAR’s resources on NAR’s Data Privacy & Security webpage. You will find resources like the NAR Cybersecurity Checklist: Best Practices for Real Estate Professionals, which provides best practices to curb the risk of cybercrime.
Remember. You can never better too careful when conducting business digitally. By being informed and cautious, you and your client can protect against becoming another victim of cybercrime.
Source: “Window to the Law: Preventing Cybercrime During COVID-19“