Cybersecurity Real Estate Scams Expanding Quickly
SAN FRANCISCO – “Catch Me If You Can” author Frank Abagnale spoke about cybersecurity at the National Association of Realtors® (NAR)’ 2019 Realtors Conference & Expo in San Francisco last week. Abagnale, who went to federal prison before spending 43 years working with the FBI, was the inspiration for the 2002 movie named after his autobiography, starring Leonardo DiCaprio.
Abagnale said that the FBI expects more than six trillion dollars in cybercrimes to be committed globally by 2021. He raised a specific warning about international phishing scams, a trend which has intensified over the past two years.
“Every weekday in the United States, five thousand phishing emails are sent out, coming from more than 115 countries around the world,” Abagnale said. “These emails are getting extremely sophisticated,” with total losses exceeding $15 billion annually. “But the answer (to this problem) is very old fashioned. No matter what email you get, you need to call and verify that email.”
Abagnale said that agents who send emails from their personal accounts – particularly when the email mentions wire instructions – are leaving their clients vulnerable to being hacked or exploited.
“As Realtors, we need to send these emails from secure sites – your company’s site, which has technology built in to keep these things from happening,” Abagnale said.
In his current role, Abagnale produces resources designed to combat and identify white-collar crimes on a weekly basis, tools which are available to the public at no cost. Abagnale referred attendees to his website, Abagnale.com, in order to access this information.
Abagnale made a number of points during his presentation. He noted the vulnerabilities of social media while offering insight on things as simple – but not necessarily intuitive – as the only effective type of paper shredder – a security micro cut shredder. He talked about the perils of debit cards and the importance of a new federal law allowing Americans to freeze and unfreeze their credit at no cost.
“We complain all the time that people are stealing our identity, but in the meantime we are telling people everything about us,” he told hundreds of Realtors in attendance. “One day we’ll wake up and realize that social media was a bad mistake, because the truth is when you start controlling the minds of two billion people and what they read and what they think, you are going down some serious, serious bad roads.”
According to FBI data, about 11,300 people were victims of wire fraud in the real estate and rental sector in 2018, representing a 17% increase over 2017. Those losses totaled more than $150 million.
“One of the fastest-growing cybercrimes in the U.S. is real estate wire fraud,” said NAR President John Smaby. “It is so critical for our members to stay on top of the latest trends within the cybercrime world so we can be a step ahead of those who seek to exploit our clients.”
The highest reported fraud in real estate in 2017 was Business Email Compromise/Email Account Compromise. In these crimes, fraudsters assume the identity of the title, real estate agent or closing attorney, and forge the person’s email and other details about the transaction. The scammers will then send an email to the unknowing buyer and provide new wire instructions to the criminal’s bank account.
NAR’s Deputy General Counsel and Vice President of Legal Affairs Lesley Muchow recently told The New York Times that there are “red flags” that can help Realtors increase their chances of accurately identifying scams.
“Wire instructions are unlikely to change at the last minute, so consumers should be especially suspicious when receiving last-minute changes to wire instructions,” Muchow said, reiterating Abagnale’s statements on Friday. “Again: Verify. Verify. Verify. Consumers need to take the extra step to talk to someone they know to verify everything before any money is wired.”
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