In this digital age, cybersecurity is a hot topic as we have become increasingly aware of the capabilities of hacking groups when it comes to compromising organizations and their clients. Although not traditionally associated with high-risk industries like finance, healthcare, or manufacturing, real estate still sees its fair share of cybercrime. Considering the large amounts of money and personal data involved with many real estate transactions, it is easy to see how real estate companies could become easy targets.
Real estate organizations must plan for current and emerging cyber threats so that they are well-equipped to guard against cyber-attacks. How much risk is presented and whether a successful cyberattack happens depends on many factors, including the level – or lack of – preparedness.
Why Do Cyber Criminals Target Real Estate Organizations?
Real estate and escrow companies have valuable information that cyber criminals want, such as files that contain bank account information and other personal information of property buyers and sellers. If criminal hackers access this information, they can use it for identity theft and other malicious activities.
Once cybercriminals detect a weak IT infrastructure, they go after the most priceless asset in today’s digital world: DATA. Personally identifiable and financially sensitive data are a gold mine for cybercriminals. They can use it to engage in a wide range of crimes such as blackmailing, extortion, and identity theft.
Lenders, title companies, and escrow agencies and even real estate lawyers are rich sources of such data. They store and exchange both personal and financial data, including names, addresses, social security numbers, bank accounts, and credit card numbers. As a result, cybercriminals end up with large amounts of profit with only a handful of successful attacks.
Lastly, huge fund transfers are processed every second in the real estate sector. Therefore, hackers find it tempting to invade their systems and divert the destination of these funds to their own accounts.
How Do Cyber Criminals Attack Real Estate Organizations?
Cyber criminals can attack real estate organizations in many ways, including:
Phishing Scams are the most common way hackers obtain information. Phishing is an electronic attempt to acquire NPI by pretending to be a familiar or trustworthy source. Hackers can use emails, texts, adverts, social media pages, and websites in a phishing assault. Hackers with malicious intent use social engineering to get users to open a malicious link or file.
By doing so, the criminal hacker can access the victim’s computer or mobile device and any connected networks and systems. They may use information such as a person’s name, address, and phone number provided to a malicious hacker for illegal purposes.
This is particularly threatening in a business that handles commercial and residential transactions. Information such as social security numbers, bank routing numbers, passwords, and credit card details are all examples of information typically entrusted to the settlement agent. Identifying scams and taking measures to stop them has become part of our daily routine.
Criminal hackers use ransomware to take control of an organization’s network or server. First, they penetrate the organization’s systems, by identifying gaps in the organization’s cybersecurity posture or getting someone to download an attachment that contains ransomware. Title companies, escrow businesses, and agencies are all increasingly at risk of falling victim to ransomware.
What is ransomware? It is a type of malware that threatens to encrypt a victim’s data or steal it and make it available on the web—unless a ransom has been paid. It can lock down a single machine or entire networks, all in a matter of moments. And attacks occur every 14 seconds.
With such a significant amount of data being stored and processed, real estate companies are high on a hacker’s list of priorities—a single home transaction is a gold mine for a cyber-criminal.
With many companies running outdated systems with known security holes, it is no surprise that the industry is a frequent target of ransomware attacks. Worst of all, because ransomware is run by criminals, even if you pay the ransom there is no guarantee you will get your data back.
3. Wire Transfer Fraud
Wire Transfer Fraud has quickly become the most potentially devastating phishing scam affecting the title industry. In the case of wire fraud, the hacker obtains enough NPI and company information to pose as someone recognizable involved in a closing. The client, usually the buyer, is contacted electronically and told there “has been a change in their wiring instructions” or “please send the following amount by wire ahead of the closing”. The wire transfer information is fraudulent and, if sent, the money can be lost. Unfortunately, these scams have had a lot of success.
4. BEC (Business E-Mail Compromise)
Cyber criminals leverage BEC attacks to hack into corporate email accounts. In a BEC attack, a criminal hacker imitates a corporate email user and attempts to defraud the user’s organization, along with its customers or partners. BEC attacks look like they are coming from a legitimate source, like your CEO, a title or escrow partner or even one of your homebuyers.
It starts with a spoofed email account. From there, a cyber-criminal will conduct research on your company and specific employees in an attempt to snag you with a spear phishing email.
Perhaps that “homebuyer” has completed their purchase agreement documentation and is returning it to you, and it even looks like an email from DocuSign or DotLoop. However, the button link redirects elsewhere—and may even likely install malware on your computer.
5. Third-Party Vendor Risk
Outsourcing data to another vendor, such as a cloud provider, poses the danger that a hacker could steal your data if the provider falls victim to a cyber security assault.
You need to thoroughly investigate potential vendors and partners in the real estate industry to guarantee that they have adequate cybersecurity measures to protect the confidentiality of your projects and transactions.
Cost of Cyberattacks in Real Estate
Do not underestimate the potential implications of a data breach. There are costly, many, and far-reaching consequences of a cyberattack, including but not limited to:
- Loss of data – either company financial data, customer, and/or project information
- Compromised employee information and payroll systems
- System and/or server shutdown
- Stolen intellectual property
- Lawsuits stemming from the failure to protect certain types of data
- Fees to get systems back online
- Ransom paid to hacker groups
- Regulatory fees/penalties
- Reputational damage
- Involuntary downtime
The ramifications of an attack extend far beyond the initial event. For smaller real estate companies, a well-executed cyberattack can even run the risk of putting them out of business.
Real Estate Cyber Security Tips
A complete risk management program includes determining digital assets such as NPI on clients, analyzing the threats represented by each, developing an appropriate security program for each threat within the company size and ability, monitoring and reporting.
Implementing a comprehensive risk management program takes a considerable amount of time and resources. To reduce your vulnerability immediately, consider taking these measures:
1. Perform a Cybersecurity Inspection
Research indicates only about half of real estate organizations are prepared to prevent or mitigate cyber-attacks. When a company does a cybersecurity audit, it gains valuable insight into its cyber threats and, in turn, can devise effective strategies to address those dangers.
Following a cybersecurity audit, seek out a third-party security consultant to offer advice and guidance on the best way to manage any identified risks. Finally, the consultant can offer personalized recommendations to help your organization optimize its cybersecurity posture.
2. Identify Effective Safety Measures
Many security solutions are available, and each has its respective pros and cons. Perform extensive research into security solutions for real estate organizations to find one that delivers long-lasting results.
Consider implementing a security system that complements the measures already in place at your company. This way, you can ensure the solution’s seamless integration into your existing processes. By doing so, you can verify the solution is easy to implement across your operations.
3. Offer Cybersecurity Awareness Training
Employees can learn to recognize cyber threats, assess the dangers they bring, and take corrective action through a cybersecurity awareness training program. Awareness training should be provided to staff at least annually and refreshed as needed (e.g. after major infrastructure changes or when a new, significant threat has been identified) so that employees can respond effectively should an attack occur.
It is not likely that these hackers are not going to stop anytime soon and will eventually raise their game to a new level. A cyber invasion of a company does not only impact their financial security, but it also damages their reputation. Therefore, stakeholders in the real estate industry must take matters into their hands, protecting themselves before the inevitable attack comes.
On an independent level, companies must upgrade their IT infrastructure by staying up to date with the latest versions of the operating systems and application software. Similarly, they must embrace modern cybersecurity measures like two-factor authentication, encryption, etc.