July 22, 2017 | Richard Sites
Cyber-security is perhaps one of the biggest and fastest growing businesses around. And no business is safe from the growing threat of cyber-theft these days. Real estate is especially vulnerable in a couple of ways. Let’s take a look at two of them.
Fraudulent Wiring Instructions
Since a majority of real estate is conducted using email, this is a great place for cyber-thieves to step in and steal. Here’s how it works: Once an un-secured email account is hacked, criminals can monitor the ongoing transaction until closing. Then, just before closing, they step in and pose as one of the parties in the transaction like the attorney’s office, the title company, the closing agent or real estate agents.
They then submit phony wiring instructions and wait for the unsuspecting buyer to wire the money to them. This could cost a buyer the entire amount they were using to buy the house.
Most companies today require all wiring instructions to be verified over the phone before money is sent to avoid this scam.
Unsecured HOA files
Homeowner Associations, like most businesses today, think that getting all services onto the internet is providing a service to the members. Even most doctor’s offices today want you to access them through a portal.
Trouble is, these small businesses are highly unlikely to have the security needed and in place to protect the information they have on their servers.
There is all sorts of private information on HOA servers and if hacked, or held for ransom, could wreak havoc for the homeowners.
In fact, there is an entirely new category of law dealing specifically with the fallout from these hacks. This includes holding the HOA responsible, and possibly the directors personally, for damage done to members as a result of these hacks. This could be very wide ranging and the financial damage could be very high.
There is also now Cyber Security Insurance to indemnify members against such losses. Is your HOA carrying it?
The Take Away
If you are a homeowner in an HOA, you should inquire in writing what steps the HOA has taken to protect the information they possess and if they carry Cyber-Security Insurance. And further, what happens to your information when you change management companies? If there a system in place to wipe their servers clean?
If you are buying a home, you should verify all wiring instructions by phone even if your agent has not advised you to do so. Failure to do this might cost you all your funds you plan on using to make that purchase and there is no way to recover them.
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