BY CRAIG GRANT
Cybersecurity has become an issue for anyone who uses a device, computer or online account. Hackers and fraudsters have targeted the real estate industry because large sums of money are in play on a daily basis. REALTORS® need to know the possible pitfalls so they can protect themselves and educate their clients about what to look for, how it works and how to not fall for it.
Some scams are very sophisticated. For example, online listing scams, which typically occur on sites like Craigslist or Backpages, often dupe consumers into trying to rent a property that isn’t available for rent. This can lead to a legal headache if that consumer not only provides funds, but also takes possession of your property even though it isn’t actually available.
A more aggressive tactic is wire transfer fraud, a form of “spear-phishing,” in which hackers try to trick the buyer in a real estate transaction. Typically, they hack into the email server of entities that handle real estate transactions, such as an attorney, lender or title company. The hacker looks for an upcoming transaction, and gets a buyer’s name and information. They then send out a fake email that appears to be from that entity with instructions on where to wire the funds, which, of course, go into the hacker’s account. This is timed to coincide with the planned transaction date—but is perhaps “moved up” by a day—so the victim doesn’t suspect anything is wrong.
A con artist who intercepts a wire transfer can make hundreds of thousands of dollars in a split second. The problem has become so severe that the FBI has set up a special division to deal with wire transfer fraud.
Fortunately, there are ways to limit one’s exposure to cyber crime. The good news is that you don’t have to be a computer geek to make security improvements. The first step is to strengthen all your passwords and change them on a quarterly basis. Assign a unique, complicated password to each site you visit.
Next, make sure that each device you use has strong anti-virus protection—every phone, tablet and computer needs to be covered. Everything running on your devices, including the operating system and apps, must be up-to-date and patched at all times.
Slow But Sure
And the most important advice is to slow down and pay attention—sometimes an extra step, while inconvenient, might be what saves you. Often if you do so, you will notice obvious tip-offs that indicate the email might not be from the company they claim they are from, or that the link isn’t a safe one on which to click.
You should also consider purchasing separate cyber-insurance (which isn’t expensive) to protect yourself and your business in the event of internet-related attacks, such as ransomware, malware, wire transfer fraud and so on. Most REALTORS® think their E-O (Errors & Omissions) insurance will cover losses of this kind, but it usually doesn’t cover digital crime.
After you have shored up your defenses, make sure everyone understands the need to follow security protocols—all it takes is one click and everybody can be exposed.
Craig Grant is the CEO of the Real Estate Technology Institute and RETI.us, which offers technology, marketing and risk management education for real estate professionals. He specializes in making technical topics easy to understand. He provides guidance on topics like digital etiquette, avoiding social media gaffes and maintaining the NAR code of ethics and fair housing standards in all communications to prevent serious business consequences.