The real estate industry is facing a dramatic increase in fraudulent activity related to the electronic transfer of money. According to the FBI, the Internet Crime Complaint Center saw a 480 percent increase in the number of complaints filed last year by those who work in the real estate industry. Also in 2017, cyber-criminals stole or attempted to steal almost $1 billion from real estate purchase transactions, up from just $19 million in 2016.
While innovations and new technologies give consumers instant access to money, they also give fraudsters that same access. Dramatic increases in wire fraud can largely be attributed to faster fund transfers; sophisticated criminals finding ways to build networks and connect with other like-minded criminals; and banks and finance companies competing to capture more of consumers’ wallet-share with aggressive marketing campaigns. Banks, the FBI, government agencies, industry organizations, and the media have all been proactive in exposing this criminal activity. They have also been responsible for educating the public about how to identify wire fraud and take steps to secure bank accounts and personal information.
As fraudsters become all the wiser and access to money only increases, it is essential that real estate businesses work quickly to protect themselves from wire fraud.
A variety of cyber-security threats remain pervasive within the real estate industry, making practitioners susceptible to fraud. The primary threat is agents’ email accounts being hacked and compromised in order to intercept documents. When agents’ emails are hacked, buyers believe they are talking with their real estate agent through email, making them feel comfortable sending personal information. Hackers are often able to communicate directly with the client and reroute funds into fraudulent accounts without the agent even knowing the conversation has taken place.
This type of fraud can impact anyone looking to purchase a home, which makes it important for real estate agents to learn some do’s and don’ts to protect their email from getting hacked.
Do:
- be cautious of what you are opening or clicking on in your email;
- create long and strong passwords;
- allow clients to respond to wire questions only over the phone and when speaking with a verified employee; and
- make sure clients know not to share personal information over email.
Do not:
- send personal information over email;
- click on suspicious emails or links; or
- allow clients to change wiring information over email.
In order to protect yourself and your clients, it is vital to keep an eye out for any suspicious activity when making transactions. Keeping agents informed of the do’s and don’ts and utilizing software to safeguard transactions will ensure safe and seamless business for years to come.