– Hi, everyone, welcome to CertifID Security Observer webinar series. We’re mixing it up a little bit this year gonna have some more fun more of a casual style but still the great content and we promise to provide you with the trends and tips that help position you as the most trusted company when it comes to the transfer of not only money, but also these areas of cyber security that just become more and more important as the months and years go on. So I’m Tom Cronkright if we haven’t had the pleasure of meeting. This is my buddy and co-founder CertifID Tyler Adams and a new face, but certainly not to our team and many of our customers. We’re just so excited to use this new format. Also know that as we move forward throughout the month of the year we’re gonna have some really exciting special guests that are just experts in their respective fields and domain. So, again promise to have really good content.
– So for those of you that have been here before, welcome back. We’re proud to say last year we had over 3000 people attend CertifID webinars. So thank you.
– Thank you very much.
– [Tyler] But as Tom mentioned this year we’re gonna do something a little bit different. We’re gonna keep the webinar series to 25 minutes or less. It’s gonna be much more conversational in nature. We’re not gonna have any slides. And we’re gonna do some fun giveaways. So you got an opportunity to win a bunch of CertifID swag.
– Yap! All kind of swag. We just asking you ask a lot of questions. Stay engaged, you’ll see the zoom message box where you can put in questions throughout. And then we will be providing some lucky winner at the end of every webinar with some prize or some swag.
– Yap, just staying good. We want this to be a dialogue we’re gonna hit some really important topics over the next few minutes together, paying us in that question and redirect. However, you’re thinking about some of these we can dive deeper into each one of these. So, the theme this year is making 2020 the year that you protect and prosper. And what I mean by that is protecting not only the transfer of money in and out of the transfer account. To protect generally to these transactions. So, today we’re gonna be… Some of these are recurring because these touch points that we covered today are gonna be major themes that will carry on throughout year. One, what happened last year and what I call fraud lens. So, what were the top things that continue to kinda knock on the door in a bad way to us as titling settlement providers or the consumers that, you’re hired to protect. Will the insurance landscape changed dramatically. We’re gonna touch on some of those themes that hopefully you can take back to your insurance advisor agents, to make sure that you are in fact protected in the way that you think you are. Almost as important or likely, maybe more important is changing laws. So the insurance community legislation is changing and it’s all around tightening up what we’re doing for our data both physically and digitally. And what happens if there’s a breach, right. Fraud protections or predictions for this year and what I mean by that is what do we think the spillover is gonna be, from what we saw really heating up last quarter of 2019 that we’re gonna see in 20. And just how to increase our level of awareness in preparedness going into this year prior to spring market hitting. So, before we get started. For those of you that don’t know, CertifID protects the transfer of money both in and out of the Escrow Account. And in doing so what we’ve seen time and time again nationally, is it just lowers the risk of wire fraud and frankly social engineering from everyone in the transaction both through awareness and the technology in a delivery. It’s just a system that is that is performing so well in real time. And we stand behind our product with our million dollar per wire transfer guarantee.
– And don’t forget, we’re now integrated with ResWare, RamQuest and Vo-di, SoftPro Select via Vo-di.
– And even better we gonna have you and your team up and running on CertifID within an hour of contacting us. This isn’t your typical software that you’ve been accustomed to in the space, we will get you up and running the same day, so don’t hesitate to reach out.
– So if you’re not using us, I mean, that’s a good point. And you want to be the company that provides the highest level of protection for money transfer and security, then we should connect. If you’re a current customer, just know this we’re only getting started. We have been working our tails off as a team. And we have no other team members in here to move mountains for the industry and we’re excited that you’re I think gonna like some releases that are coming out in the next few months.
– All right, so let’s dig in. Tom, what were the top three fraud trends we saw in 2019? Yeah, so three recurring themes but the number one again for the second year in a row was Buyer cash to close. So we had Buyer cash to close, Mortgage payoffs heated up. And then we saw a new vector because of the refinance little bubble that we had. Starting mid summer carrying into fall when rates dipped. Where actually the cash out refinance proceeds. So again Buyer cash to close again, Mortgage payoffs and Refinance proceeds wire kind of carried us into the end of last year.
– And of those which do you think poses the greatest threat kind of moving into 2020?
– I think the greatest threat still is to the consumer because we talked about this in previous conversations is there’s no muscle memory in real estate.
– So if the average time now is being extended for the staying at home to seven to maybe 10 years in some markets and then you have the new generation of buyers that are carrying us into this next way you know 83 million millennials, then there’s just nothing to go back to
– to say this feels different
– [Tom] Than what is before. Why couldn’t I trust this information.
– And there’s so much information, right. I mean, they’re being asked to do so many things throughout that process and if you’ve never done it before.
– Yeah, and Look, I’m a large title agency owner and in you can get lost and just kind of that workflow that. Yet, I’ve got, whatever 1000 closings this month.
– and we’ve got a pipeline and then the refinances hit up and you guys all felt it. The summer it was a tsunami of work, like literally a tsunami overnight, starting in July. And we can’t lose sight as an industry that this is someone’s life savings. This is a life event and I think that’s what we’re gonna spend quite a bit of time on this year. Is how do we wrap our arms around the consumer that is the most exposed. And the concern then for the industry is that if the buyer does lose funds and we’re gonna go into some of this stuff. We’re all gonna get named in the lawsuit. There’s just our next white paper is gonna to be exactly on point for making this case, if you will. But that’s, the one I’m most concerned about.
– Sure, so knowing that isn’t it true that the insurance landscape is really responding to these trends and I guess maybe you should take a minute as a title agency owner to explain what you’ve seen regarding the policy renewals?
– Yeah so it’s the old saying that the industry and this isn’t the title industry this is more, professional lines and cyber coverage. The global insurance carriers are always 12 to 18 months behind what we’re actually seeing in real time. So as many of you know I own a large agency along with my business partner, Warrant in Michigan. And we went through a very interesting E&O and cyber insurance renewal. We’ve talked about this the whole team.
– What stood out, were really three things and they stood out in a big way. As to the E&O policy. The premiums went up, we saw an increase of I’m gonna say roughly 20% or so we have had no claims. We haven’t had claimed that I don’t know how long. Okay, so the premiums went up and you’re just seeing more sub-limits and conditions precedent where the professional lines carriers really are pivoting away from wire fraud loss.
– [Tom] So we had a very large endorsement for what’s called electronic funds transfer, we would know it as the wire fraud endorsement. And that was sub-limited down by over 50% for us. So, big change there and premiums went up.
– Yap. Cyber was even worse. So, the cyber landscape when it deals with data breach and if you have any type of fidelity or cyber crime coverage on your cyber, our cyber policy actually doubles.
– Didn’t you say that it was that they labeled it like category industries?
– Yeah, so what we learned and this is not good is that there have been so many losses around wire fraud and now if you’ve been paying attention to the ALTA Ni-q-u or October Researcher any of the industry feeds. They’re starting to realize that there is a value to companies or municipalities that have real estate information right. We’ve talked about this like security through obscurity. Well, that’s gone now guys because they can see that we’re holding a ton of data and the insurance industry frankly, wants to see a behavioral change at the at the title insurance or the the title industry level that we have to, yap.
– So I guess this is a good point to kinda go a step further and tell everybody just a little bit about what we’re working on it CertifID.
– All right, so we’re a curious bunch. And we went through our renewal–
– One way to put it.
– We decided to get to work and say okay this isn’t gonna work. One, we can’t have these global carriers not insure us at the way that we need to as ta-iro-nji professional. So, we rolled up our sleeves and we haven’t formally announced this but we have been in direct connection with Lloyd’s to provide additional coverage to title companies that are using CeretifID. And we’ll have more on this exciting program that we’re gonna be sharing in the next 30 days to all the customers and any new customers you’ll be able to benefit from this. But, it is specifically centered around if you’re using the platform and the messaging and the things that we’re trying to educate our customers on. Lloyd’s actually recognize that to say, okay, that will mitigate risk.
– Right, I mean you said it best where you just kind of explained it as like, Lloyd’s is gonna recognize, not all companies are made the same, right?
– [Tyler] And the companies that start to prove that they are taking extra precautions are gonna rewarded for that.
– Yeah, and I think I wanna pick up on that because guys that’s a theme where we have this protecting prosper. The companies that are leaning in and really doing the work. And this isn’t just a CertifID conversation this is more of a holistic like we’re adopting the technology. We’ll get into the process of procedure and just kind of giving it a rethink and almost like a V2 of how we’re approaching data and money transfer risk.
– [Tom] Are gonna be here in three to five years.
– And I think this is such a big issue that it’s gonna force more consolidation in the industry than even the recession did. I mean, this is the one. So good point, Tyler.
– Alright, so looking forward what are some best practices and laws that our viewers should be aware of in the new year?
– Yeah, so I wanna touch on a few things. And since I started a tech company, I had to revert to readers. So, I’ll read to you a couple things that stood out. If you’re in the title space and you haven’t read the most recent 3.0 version of the ALTA Best Practices. I’m having our team actually load this into the comments panel right now. You actually need to give this a read. I actually gave it another read last night in preparation for this talk. And I’m just gonna pull out a couple pillars that you need to you have to be aware of and now, why am I saying that? You can say aah alta sch-mul-ta right? It doesn’t, it’s more of an aspirational thing and there’s a self at test station and I can say on best practice compliant this and that. It’s beyond that now, guys because if you look at the case law, plaintiffs lawyers are citing these best practices as the industry standard in these specific areas. So we’re on notice. And if we can’t check the box that we’re complying and you’re not using a third party to validate and ALTA has and did the underwriters. Talk to your state agency manager on who can help you through this. We’re going through right now with Matt, Roning and Saef but there are others out there that you gotta check the box. And in its work. I’ll tell you right now it’s working expense. But so I wanna call out just a couple of those. Best practice Pillar two, deals with adoption and maintaining written procedures and controls for the Escrow Trust Account. So the ALTA Best Practice committee and I think did a great job of saying, okay, let’s beat this up a little bit. One that didn’t change was Escrow Account Reconciliation. If you’re not using, Dic and Rhino and their team and Matt. I mean you guys got to connect with them because that’s just that is a no brainer solution that can automate that process. The other is positive pay and reverse positive pay. If you’re using a financial institution that doesn’t offer positive pay then you have to move financial institutions.
– Right. Talk to Tom Linehan and I think United or whoever in your market but I mean they have great technology. And then this was a big one. So at the end of the new second pillar a written wire transfer procedure is in place and tested at least annually. For outgoing transfers a procedure to verify the instructions. For incoming wire transfers that includes alerting consumers, right. And then a written response plan. So ALTA has the rapid response plan. You can find our white paper when minutes matter on our website. But guys these are the types of things that are non negotiable. And then pillar three just quickly really look at pillar three because pillar three blends into the model act from the NIC around data security. And pillar three is adopted and maintain a written policy and information security plan to protect Non-Public personal information. Otherwise known as PII. And that I mean, again I won’t read it to you here but you can see my highlighting. There’s some really important things that you’re gonna have to be responsible for. That’s both on network security and digital information and how we store physical files, okay. So that’s ALTA.
– Sure, why don’t you give them 30 seconds on state on data privacy. We’re loading up a couple things. I’m loading up a link to a data privacy monitor. Baker Hostetler did a really good job. And it’s basically a dashboard that goes state by state. So if you think about New York, South Carolina. California CCPA that we’re hearing a lot about. Michigan has one, where I would go with this. If you’re not certain contact your local Land Title Association, state representative and ask them about any proposed or pending legislation that’s gonna go into effect into into your state. And then the last link is simply being aware of the NIC model Data Security Act. And we’re gonna load that up for you because directionally this is the beacon that you’re gonna need to be aware of. There’s many states that have adopted it. And the feds have actually urged adoption at the statewide level, that they look at the NIC model act as kind of the starting point for, the conversation. So hopefully that’s helpful guys. But this is, big stuff. Like there’s one thing to say, hey, I’m involved in a lawsuit because there was a loss. There’s another thing for the insurance commissioners to lay in. I mean I understand South Carolina or one of the Carolinas, it could be a disbarrable offense.
– If you’re not taking care of business in this way right now.
– Well, all right, let’s have a little fun. Let’s make some predictions for 2020. So Tom, what’s one of your big predictions for the year.
– The big prediction, I think the biggest prediction for this year is that fraudsters are gonna be more aggressive and they’re gonna be more brazen. And if you look at, if you just do a search for cyber predictions 2020, there’s a common theme social engineering is not going anywhere. To your point, there’s so much information out there on transactions and transaction participants. I think we’re gonna see more pitch perfect messaging. More timely messaging that faces either our employees or faces our customers the buyers and sellers.
– [Tom] That ultimately tricked them. I think that’s gonna be one of the biggest headlines unfortunately going into last year. So it’s like a hangover that just won’t end. It’s just year over a year they just and why?. Here’s why, all you have to do is trick somebody. So what we’re experienced–
– Right, yeah.
– [Tom] We talk about wire fraud, right?
– This isn’t like big high tech cyber crime. This is tricking Tim or tricking Sally and armed with that information they’re coming in with such accuracy the ones we saw and help recover last year were just their next level.
– Absolutely nice little, yap. How about you? What do you think? I’m doing all the talking here
– kind of following up on that. I mean, I really do think it’s the timing and sophistication of frauds against consumers. So specifically in our space its against buyers. That continues to be a theme that we see over and over and over again. As you’re aware not to tease out another thing that we’re working on currently. But, that’s been a huge pillar of our product development. Our engineering team is currently working on something specifically to continue to provide additional incentives and coverage for the buyers because, like you mentioned earlier they’re in a situation where there isn’t muscle memory. They haven’t gone through this before no matter how much we talked to them and we help them there’s still a chance they’re gonna be tricked,
– Right, yeah, totally agree.
– [Tom] Totally agree.
– Wanna give us one more quick one.
– I would say another quick one and not to hack on this too much but, denial of insurance coverage. I think, I don’t want anybody that’s a customer of ours or attending these sessions to be surprised that if you submit a claim because there’s a data breach or a wire fraud or whatever happens to be either because your money left your Escrow Account or it never arrived from a buyer. You thought you were paying, whatever it happens to be for premium. And all of a sudden, you forgot to check one little box and the procedure you can’t document it.
– And then there’s insurance denial. And all I could say there is do the dry run with your carrier like get specific on, if this then is it covered. If this then is it covered in make sure you codify that in process and procedure and you verify that it’s being done. I think that’s–
– [Tom] Two things this year.
– All right, rapid fire. So, you might be asking yourself what can you do to be safe in 2020? Here are the three things that we believe you should be considering. So number one, is to enhance your communication with transaction participants about wire fraud. Communicate early and often about the risk. We talk about it all the time no matter what you’re doing this is the number one thing. The more you’re willing to have the conversation, sooner you have the conversations the more likely you all are to stay safe.
– Yap, I would say, improve process as well. Look internally, because we’re all as leaders or managers in the organization. We’re only as good as our individual employee understands the risk and is prepared right as educated. So, look at current prospects and procedures and make sure that they’re sinking right now with the risk. Industry best practice guidance, state law, what are the court saying? What’s the threat vector coming in? And just make sure that that you’re current. I’ll say this, fraudsters are people and they’re lazy people.
– [Tom] So we talked about this. If you lock the door, put a fence around your house. Light it up, chain a couple of dogs to the front, they’re gonna move on to the next house, right. You’re not gonna be 100% safe. But, ’cause that, I don’t think that exists anymore but I think the companies that continue to look at this as more of a journey and an investment are the ones that, they’re just gonna get laid off.
– They’re gonna go knock on some other door.
– And that takes us to number three which is adopt new technology. So maybe not everybody wants to have dogs out front but, you can certainly go–
– [Tyler] You can certainly go ahead and invest in email monitoring and better data storage and password management. We’re not talking just about CertifID but there’s a lot of different thing and you can do out there that are gonna help you be more secure as an organization which is ultimately only going to as Tom put it, encourage them to go to the next house down the street.
– Yap, totally agree.
– So we had a couple questions come in. First one was when will you be integrated with Qwilr. We do not currently have a time frame on a Qwilr integration, but know that we are in conversations with their teams and will inform you as soon as that becomes available.
– Another question, do you have examples of those improved communications that you can share? Yeah, we don’t mind after this for everyone that will give you some guidance on that. I mean, in our portal, we provide templates and just kind of a head start on how to think about it.
– That is a good thing to point out, though. So one of the benefits of working with CertifID is we do have a complete customer resource portal. So for all of our customers we actually provide email alerts to buyers and the sellers and to everybody but, as Tom mentioned, if you reach out, we’d be happy to share some of those details with you.
– I think the bell ring around communication is really timing and the quality of the communication. And that’s what you’re gonna be judged on when you’re trying to get out of the conversation. If the buyer–
– [Tom] The challenge of buyers is you don’t control their behavior. You’re not standing there at the bank while they’re getting ready to move the money. So, having as early an awareness campaign or something in front of them, even if you could get your real estate agents or the lawyer or the lender involved in the deal to kinda prime this awareness for you. ‘Cause sometimes in title we might not see the customer for a week, they could be out looking for a house. We helped with recovery on a gentleman that wired his funds, all of his cash to close a $600,000 property. Wired over 100 grand the purchase agreement hadn’t even been signed because his attorneys email–
– [Tom] So, early communication often communication. Yes, we can absolutely help you with what that should look like, yap.
– Did we do it, did we actually pull-off a webinar in 25 minutes.
– Because you’re here. I could never do that. People will listening to me jabber for 45 to 50 minutes all year man. No, this is good. Well we really hope you enjoyed it. This was fun for us and we look forward to continuing the webinar series next month. So bring your friends.
– Awesome, thank you.
– [Tyler] All right.
– Take care guys.
– [Tyler] Have a good one.