Five major cyber threats to real estate businesses
While many industries have struggled to navigate the changes brought on by the pandemic, the real estate industry has continued to thrive. Although real estate has found ways to combat many of the unforeseen threats of COVID-19, cyber risks continue to be a heightened concern. Remote business operations have presented new digital vulnerabilities that, if left unprotected, can have disastrous and costly consequences on Canadian real estate businesses.
According to the CIRA 2020 Cybersecurity Report, approximately 30 per cent of Canadian businesses have seen a spike in the volume of cyberattacks and more than 50 per cent of businesses have implemented new cybersecurity protections in response to COVID-19. While this is certainly a step in the right direction, there is still work to be done as half of businesses still have not taken the appropriate security measures.
So, what are the five major cyber threats to real estate businesses and how can you protect against them? Let’s find out.
Mortgage closing wire scams
Wire scams are a very common cyber threat associated with payment transactions when buying a home. Hackers obtain personal information from upcoming homeowners by sending realistic-looking emails regarding mortgage closures. These emails commonly outline steps of how to wire the money over to the agent, but instead, the mortgage down payment is successfully taken by the hacker.
Business email compromise (BEC)
BEC is a type of cybercrime that tricks real estate employees into wiring funds to a fraudulent business partner. The hackers will mirror emails from CEOs, escrow agents or attorneys and wire funds to the con artist. This tactic has cost businesses billions of dollars and remains one of the most serious threats to real estate today.
Title fraud occurs when a fraudster executes an identity scam on someone else’s title. This starts with hackers stealing data from an unprotected real estate business or directly from the homeowners to obtain personal information. Email interception, phone scams and phishing attacks are the most common sources of identity fraud as victims unknowingly hand over personal information, unaware of the crime taking place. After the hackers have acquired the necessary information, fake identities are created using the hackers’ own picture and forged documents. The hackers will then undergo tasks like remortgaging the home or even selling the home while pretending to be the homeowners. Snowbirds are most targeted for these situations as potential buyers – and scammers – can view the home while the homeowners are away for months at a time.
Real estate businesses without secure IT infrastructure are more likely to be susceptible to cybercrimes such as malware, data breaches and ransomware. Due to minimal rules and regulations regarding a business’ in-house IT security, most real estate businesses have not invested in the proper training or programing to prevent them from cyber vulnerabilities. This is commonly seen with businesses that use cloud storage to organize data and other confidential information without embedding proper data protection software against potential hackers.
The real estate industry, like many others, has been crippled by the effects of ransomware – a form of malware that can encrypt all data within a digital operating system. This makes all digital operations and systems unavailable until a ransom is paid by the business. This can be detrimental, especially to small real estate businesses, as most housing delegations and documentation processes are largely dependent on digital systems. These systems store information, undergo transaction details, communicate with business partners and clients and more. It only takes one employee to make the wrong click and lock out an entire business from essential workplace systems, forcing businesses to potentially pay a ransom with a hefty price tag.
Why is this important?
The pandemic has spiked an even larger demand for digital technology, and it is important for real estate businesses to not only adapt but do so safely and securely. The first step should always be to protect your clients, their personal information and the digital systems that help your businesses thrive. Implementing new cybersecurity technology and enforcing cybercrime training among staff are just some of the ways we can adapt to this new digital normal and prevent hackers from damaging real estate businesses across the country.