A major risk real estate professionals should be aware of is fraudulent wiring instructions. Cyber criminals are increasingly sending false messages on behalf of home sellers, real estate agents, title agents and lenders, and many times these messages involve instructions to transfer money.
Here are some precautionary measures you should consider from a risk management perspective to reduce the chances of falling victim to fraudulent instructions:
Be Mindful of Links and Attachments
Cyber criminals use attachments and links to gain access to emails and other login credentials, along with your personal information. Beware of phishing emails embedded with links and attachments from unknown addresses.
Review Emails and Verify Instructions
If wire instructions are received via email, mail or phone, you should always verify you are speaking with the right party by meeting in person or following a call back procedure using a phone number from a third-party source. This practice will ensure you are confirming with the correct individual.
If wiring instructions are ever changed, you should presume the change to be fraudulent (better to act with caution than without). Review the modified instructions in detail for any inconsistencies and always follow a call back procedure.
Keep documentation of any correspondence regarding important matters. Having documentation can show due diligence on your behalf if a negligent or fraudulent claim were to arise.
Secure Proper E&O and Cyber Liability Coverage
Even after following precautions, you or your staff could fall victim to fraudulent instructions. Your insurance policies could provide coverage and even save your business. Errors and omissions (E&O) insurance or a crime bond could provide coverage if you made an error acting on false instructions. Cyber liability insurance could provide coverage if there was a data breach, and you were not involved in the fraudulent wire transfer (but a criminal was impersonating you).
Review and verify you have insurance coverage to protect your business and employees.
Following these precautionary procedures can save your business, whether it reduces the likelihood of falling victim to it in the first place, or recovering from it after the fact. To learn more about wire fraud, view this post from Stewart’s Chief Information Security Officer. To review your insurance policies or ask about additional coverages, contact our advisers directly at email@example.com.