The real estate industry has been a fertile sector for online fraudsters for a decade or more – and recent research says the scams have increased exponentially.
In a public service announcement released on July 12, the FBI Internet Crime Complaint Center (IC3) reported that the real estate industry has become especially susceptible to business email compromises (BECs) and email account compromises (EACs).
The attacks impact all levels of the industry, including title companies, law firms, real estate agents, and home buyers and sellers. In the past year, the highest victim losses reported in one month came in September 2017 at $18 million.
Meanwhile, new research from Proofpoint underscores the threats to the real estate industry. "The fraudsters prey on people's good nature and desire to get business done," says Sherrod DeGrippo, director, emerging threats at Proofpoint, which published a blog last week that outlines the major security threats facing the real estate industry.
DeGrippo adds that real estate transactions typically include electronic signatures, countless exchanges of documents via email, and a variety of interactions with potentially unfamiliar contacts. And, of course, there's also a lot of money involved.
"When a real estate person holds a 20% down payment, that can be thousands, possibly millions of dollars," DeGrippo points out.
Jessica Edgerton, executive vice president of operations and corporate counsel at Leading Real Estate Companies of the World, says the real estate industry has been fighting these battles for many years.
"Part of the problem is that the modern real-estate deal is a complex transaction involving a large number of number of parties, all of whom are sending sensitive information via electronic means," Edgerton says. "More players and more electronic communications mean more potential holes for the fraudsters to sneak in. And the stakes are high. A home is the biggest purchase of most people’' lives.
"Down payments are significant chunks of money, so real estate-targeted wire fraud is a lucrative business, there's no doubt about it," she says.
Proofpoint's DeGrippo says the five top threats the real estate industry and potential home buyers face are:
- Banking trojans: Malware that gets in between the user and an online banking session. Once they have the user's credentials they can potentially steal the total amount of the transaction.
- File downloaders: Threat actors will send an email with an attachment or link and as soon as the user clicks on it the criminal gains access to the user’s machine. From there they can either steal valuable files from a machine or infect the computer with additional malware or ransomware. One of the most common methods: via an attachment that requires the user to enable macros or content within Microsoft Word, which allows the downloader malware to pull other kinds of malware onto the machine.
- Information stealers: The criminal gains access to the victim’s machine via installed stealer malware. Once that gets installed on a victim's machine, the attacker can steal passwords stored in a browser or sensitive documents stored on the machine, including documents such as W2s or other tax files.
- Corporate credential phishing: Here the hackers leverage a corporate brand to lure the user into clicking on a phish. In the real estate industry, bad threat actors often use the DocuSign logo fraudulently to get unwitting users to click on what seems to be a legitimate transaction.
- Consumer credential phishing: Attackers will use common home buying and consumer brands that frequently send notification-style emails, including Amazon and Facebook, to lure homebuyers into making fraudulent transactions.
Gad Naveh, advanced threat prevention evangelist at CheckPoint Software Technologies, says real estate companies should start by keeping their business employees aware of the fraud problem in the real estate industry.
"Companies also need to have protection at their endpoints," Naveh says. "There are ways today to recognize if people are reusing their passwords. Companies can use tools to set policies for their business users not to reuse the passwords."
Brokerages should consider educating sales agents and office managers about cybersecurity best practices, Edgerton says, and that agents should educate home buyers about the potential for transaction-based fraud. And home buyers should always pick up the phone and call the real estate office before wiring money to verify that the instructions are correct.
"Legitimate businesses are not going to send home buyers a link to verify their credentials," she says.
As for the ongoing DocuSign scam in which home buyers are being lured to click on websites with fake DocuSign logos, she says unless users are absolutely sure of the sender, "don't click on anything in a notification email. Instead, go to the DocuSign website and click on the 'access documents' link in the top right corner. You can enter the code you received there without risk."
- FBI: Email Account Compromise Losses Reach $12B
- Deconstructing a Business Email Compromise Attack
- BEC Attacks Don't Always Require Sophistication
- 6 Eye-Raising Third-Party Breaches
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