Cyber Fraud - Prevention Best Practices

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Cyber Fraud How it happens and how to prevent it Presented by: Hector Ariceaga, MBA VP Area Manager First American Title

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Agenda 1

FRAUD IS REAL - VIDEO

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SECURITY BEST PRACTICES

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HOW THE SCAM UNFOLDS

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WHAT TO DO IF YOU FALL VICTIM

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THE THREAT VECTORS

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ADDITIONAL RESOURCES

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Fraud Is Real

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Fraud Is Real

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What is at Risk?

Earnest Money or Other Closing Funds

Loan Payoffs

Seller’s Net Proceeds

Professional Commissions

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The Fraud Process It happens gradually

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Hacker gains access to victim’s eMail

Hackers will try to root into identity as far as possible

Hacker assumes control of conversation

Hacker strikes by providing fake wiring instructions

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Setting the Trap Hacker baits victim into handing over credentials

The opportunity arrives Hacker has all the details needed to consummate the fraud

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Consummating the Scam Hacker will send urgent message asking victim to act promptly

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Threat Vectors

A B C

Hacker gains access to victims e-mail Hacker may or may-not know in advance that there is a Real Estate transaction underway

Hacker compromises social media or other acct Weak Social Media credentials are an easy way for hackers to establish a beachhead inside victim’s accounts

Hacker installs malware in victims computer Hacker installs malware in victims computer that allows him to spy and track victim’s movements online

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Security Best Practices

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Install AV/Malware Software

Keep All Software Up to Date

Run Scans Regularly

Keep Your OS Updated

Secure Your Network, incl. IOT

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Security Best Practices

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Think Before You Click

Keep Your Personal Info Private

Don’t Use Open/Free/Unsecured Wi-Fi

Have Strong Data Management Policies

Use Strong/Unique Passwords

Red Flags WATCH OUT FOR SOME OF THESE COMMON TACTICS Seemingly legitimate emailed transaction instructions contain

Emailed transaction instructions direct payment to a beneficiary with

different language, timing, and amounts than previously

which the customer has no payment history or documented business

verified, and authentic, transaction instructions.

relationship, sometimes in amounts similar to those in the transaction

Transaction instructions originate from an email account

Emailed transaction instructions include markings, assertions, or language

closely resembling a known customer’s email account;

designating the transaction request as “Urgent,” “Secret,” or “Confidential.”

however, the email address has been slightly altered by adding, changing, or deleting one or more characters Emailed transaction instructions direct payment to a known

Emailed transaction instructions are delivered in a way that would give

beneficiary; however, the beneficiary’s account information is

the target a limited time or opportunity to confirm the authenticity of

different from what was previously used.

the requested transaction.

Emailed transaction instructions originate from a customer’s employee

Poor grammar, spelling errors or improper formatting.

who is a newly authorized person on the account or is an authorized

Conversational tone and vocabulary different that in previous

person who has not previously sent wire transfer instructions.

communications.

Overly generic greetings.

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Steps to Take if Fraud Suspected IMMEDIATELY CHANGE PASSWORDS Make sure to change all accounts that may have been

RUN A/V SCANS

accessed as part of the transaction

Scan for viruses and other malware

CONTACT FINANCIAL INSTITUTIONS Institutions may be able to stop or reverse further funds transfers

REPORT TO FBI Internet Crime Complaint Center http://www.fbi.gov/scams-safety/e-scams

CONTACT ALL PARTIES AFFECTED

BROKER SHOULD REPORT

This will be the most embarrassing part but extremely

Report to State or Local Realtor

crucial. Make sure to notify everyone involved in the transaction to be aware of potential fraud

REPORT TO FTC www.ftccomplaintassistant.gov/#crnt&panel1-1

Assoc. and warn other agents

Potential Liability PUT YOUR PORTFOLIO IMAGES HERE

Compromised Systems

Unsecured Communications

Other Actions

Broker’s caused or failed to protect e-mail or

Broker sent confidential information via

Broker through other negligent actions aided

computer systems from compromise.

unsecured channels and information was

in the commission of fraud.

used to perpetuate fraud.

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And One More Thing TEXT WITH IMAGE PLACEHOLDER

ERROS AND OMISSIONS INSURANCE MAY NOT COVER Should the real estate professionals be facing a lawsuit, they may want to look into their Errors and Omissions Insurance. However, there is a possibility that their E&O policy does not cover claims arising from Wire Fraud.

This may leave the RE professionals in a situation where they have to pay for their legal defense, and any potential judgements, on their own.

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Educate Your Clients THESE STEPS CAN GO A LONG WAY TO PREVENTING FRAUD

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Provide Consumer Warnings put consumer warnings on websites and communications

Use Secure eMail Communications Remind clients that free eMail accounts are at greater risk of hacking

Educate them about proper Wire procedures Provide notices to consumers informing them that the title companies’ wire instructions will never change during the transaction

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Instruct Consumers to Call Before Wiring Consumers must call a known number to verify wire instructions immediately before transmitting

Use Only Verified Contact Information Consumers must only use contact channels known to be safe. Never call or reply to contact info provided via email

Be Skeptical Consumer Warn consumers to be aware an look-out for fraud. If anything appears suspicious, it probable is.

Warn About Fraud – Often!

SAMPLE NOTIFICATION VERBIAGE

Be Aware!

Wire Fraud!

Warning: Wire Fraud Advisory!

Be aware! Online banking fraud

Due to increased fraud, buyers,

is on the rise. If you receive

sellers and lenders should confirm

an email containing WIRE

all wiring instructions by phone

TRANSFER INSTRUCTIONS

directly with our office before

call us immediately to verify the

transferring funds.

Wire fraud and email hacking/phishing attacks are on the increase! If you have an escrow or closing transaction with us and you receive an email containing Wire Transfer Instructions, DO NOT RESPOND TO THE EMAIL! Instead, call your escrow officer/closer immediately, using previously known contact information and NOT information provided in the email, to verify the information prior to sending funds.

information prior to sending funds.

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Computer Security Resources Choose a Password Manager - http://online-password-manager-review.toptenreviews.com/ Choose Online Backup Service - http://pcsupport.about.com/od/maintenance/tp/online_backup_services.htm Choose Private VPN - http://netforbeginners.about.com/od/readerpicks/tp/The-Best-VPN-Service-Providers.htm BoxCryptor - https://www.boxcryptor.com/app/referral/?code=JGjhHXqRr1SWCRAj Avast Free - http://www.avast.com/en-us/download-thank-you.php?product=FAV-ONLINE&locale=en-us AVG Free – win - http://free.avg.com/us-en/free-antivirus-download AVG Free – mac - http://www.avg.com/us-en/avg-antivirus-for-mac Malwarebites Free - https://www.malwarebytes.org/mwb-download/

Ccleaner - http://www.piriform.com/ccleaner/download AdAware - http://lavasoft.com/products/ad_aware_free.php

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Informational Brochures

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ADDITIONAL RESOURCES

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Firstam.epropertywatch.com The FBI calls this new class of lien fraud “The Latest Scam on the Block” Protect against this latest scam is through proactively monitoring

NAR Cyber-Fraud Handout - PDF Protecting your business and your clients from Cyberfraud https://www.nar.realtor/sites/default/files/handouts-andbrochures/2015/protecting-from-cyberfraud-handout-2015-1124.pdf

Identity Theft Recovery Assistance Consumers may receive assistance if believed to be victims of IT. www.identitytheft.gov

FBI – Internet Complaint Center Consumers are encouraged to forward all Phishing eMails to IC3 – www.ic3.gov

NAR – Fraud Alert for Buyers - Video NAR General Counsel Katie Johnson warns buyers about wire fraud scams during the purchase of their home. https://www.nar.realtor/videos/wire-fraud-alert-for-buyers

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Meet Your team STANDING BY TO HELP YOU

Hector

Donna

Marcia

Joyce

VP – Area Manager

Sales Manager

Title Manager

Escrow Manager

hariceaga@firstam.com

dmannila@firstam.com

mlind@firstam.com

jdanderson@firstam.com

503-310-6945

541-246-4796

541-465-8794

541-465-8776

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THANKS

WE LOOK FORWARD TO HELPING YOU WITH ALL YOUR TITLE AND ESCROW NEEDS

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