Sunday
October 22, 2017

Make a Safety Check Against Wire Fraud

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Make a Safety Check Against Wire Fraud

During September’s REALTOR® Safety Month, be sure to take precautions to protect yourself from physical harm—and to protect both yourself and your clients in today’s digital world, says Marc Gould, vice president of business specialties for the National Association of REALTORS® and executive director of REBAC.

Gould warns in a recent column at RISMedia about the threats cybercrime is posing to real estate transactions. An email-based scheme has been widely reported since surfacing in 2015, but victims are still falling prey and Gould calls it “one of the worst security issues in the industry.”

Criminals are gaining access to the email account of a party in a real estate transaction. They follow the communication between the parties. As closing approaches, they send an official-looking email to the buyers directing them to wire their down payment to the criminal’s account. The unsuspecting client does so and the funds are usually untraceable and lost.

Gould offers some of the following tips to keeping you and your clients safe from hackers:

Protect your email account: Use a strong, unique password. Be sure to change it occasionally. Have antivirus software in place and keep your programs up-to-date. Avoid using public Wi-Fi.

Encrypt: Do not rely on standard email to send any sensitive information, such as financial data, contracts, or wiring instructions. Use encrypted email, a secure document-sharing platform, or a secure transaction-management platform along with a phone call to your client.

Warn your clients: Be sure to alert every client to the dangers of wire fraud and to the signs it's happening and how to prevent it. Gould even recommends considering having clients read and sign a notice regarding the possibility of cybercrime hitting the transaction.

Insure against it: If a breach does occur in one of your transactions, you could be subject to a liability claim if investors discover that access was gained through your company’s email account. Gould recommends adding cyber liability to your standard errors and omissions insurance policy to minimize potential losses.

Source: “Staying a Step Ahead of the Bad Guys,” RISMedia (Sept. 19, 2017)