Cyber fraud is unhinged and has hit an epic level in real estate transactions. We saw a significant change in the level of sophistication and precision last summer and it has only gotten worse. Wire fraud activity increased 480% last year in the title industry alone and cyber crime is estimated to reach $2T by the end of 2019. To put this in perspective, only eight countries in the world are expected to have GDP above $2T this year.
Cyber criminals are successfully using phishing scams to gain access to the accounts of representatives in a transaction (agents, lenders and title providers) to introduce a last minute change to the funding process and manipulate the transfer of buyer and seller funds to fraudulent company accounts. Here’s a link to the first lawsuit filed in Colorado by a couple who lost over $272K in a recent wire fraud (I promise it’s a good link). The couple named the real estate brokerage, lender and title company – this is the first case of its kind nationally and is being closely watched to see how the courts will assign fault (if any) for failing to educate and keep the couple safe from fraud.
Last Friday the CFPB took a historical step in releasing a Consumer Warning on its blog warning consumers of mortgage closing scams that are rippling across the country. It includes a great summary of how the fraud starts, how clients are harmed and practical fraud prevention tips. Other federal agencies have issued similar releases such has the Federal Trade Commission, FinCEN and the FBI.
We recently published a set of recommended best practices that can be found at: Sun Title Data Security Best Practice Tips
We are leading a free national webinar that will be held on Wednesday, August 9, 2017 from 2-3pm EST. We will be speaking with Matthew Froning, an expert in cyber security and best practices. Please take the time to register for this webinar.
In order to keep ourselves and our clients safe from cyber crime, we must adopt a culture of compliance and curiosity. There is no “silver bullet” to keep us safe but rather the need to layer hardware, software, process and educational best practices to lower our digital risk profiles.
I look forward to connecting on the webinar and sharing more.