A Layered Approach to Prevent Wire Fraud

Wire fraud is a rampant crime that plagues the real estate industry. Learn the basics of wire fraud prevention in this guide.

A Layered Approach to Prevent Wire Fraud

Wire fraud is a rampant crime that plagues the real estate industry. Learn the basics of wire fraud prevention in this guide.

Written by:

Tom Cronkright

Read time:

3 mins

Category:

Fraud Prevention

In 2018, business email compromise losses reached $12.5 billion. Today, that figure continues to grow at an alarming rate. Yet, armed with the knowledge that prevention is always the best solution, attacks like these can be thwarted. Nowadays, powerful safeguards exist to protect your business.

Wire fraud prevention involves investment and continual refinement in the areas of workplace education, business processes, and technology. However, the optimal strategies for your organization will depend on your tech stack, and the type of data you are protecting.

While not an exhaustive list, the following information serves as a guide to help you create a comprehensive plan, tailored to your specific needs.

In this article, we outline the key components of wire fraud prevention. When used together, they form a strong shield to protect your real estate business.



Workplace education



When it comes to wire fraud prevention, your employees are the first line of defense. Your real estate organization is only as strong as the weakest link in your security chain. All it takes is one wrong click to compromise your sensitive information.

Instead of hacking, fraudsters now rely on social engineering to get their hands on vital data. By employing digital reconnaissance, cyber perpetrators gather information on their targets. With this data, they trick the victim into divulging credentials, such as their usernames and passwords.

For example, cyber scammers find out from social media that your employee is an avid user of Netflix. They’ll construct a convincing email posing as Netflix, asking the employee to login to the website. Of course, the site will be fake, and any credentials entered will go straight to the fraudsters.

To ensure your employees don’t fall for these scams, they need to learn what real-world examples of social engineering look like. Educating your workforce also involves testing their understanding and reaction to potential threats.

All staff will need to learn and practice good digital hygiene, by using strong passwords, password managers, and two-factor authentication (2FA).

Business processes



The second layer of wire fraud prevention relies on your business processes. In 2018, 47% of small businesses suffered at least one cyber attack. This high statistic indicates that SMEs don’t have the appropriate protocols in place to keep pace with evolving fraud methods.

It’s absolutely imperative that you and your employees have a system to verify identities and sensitive data. Do this at the start of a transaction to catch any anomalies in the process immediately.

Also, make sure your data is safe, both in the digital and physical world. In your office, take steps to keep sensitive information away from prying eyes, and register and escort all visitors.

Software

person looking for wire fraud prevention software on laptop

Source: Pixabay.com

The next layer of wire fraud prevention is software. The most basic software you should have is an antivirus program. Big names in the industry, like Kaspersky Lab, have blocked 843,096,461 attacks in a single quarter. No doubt, a significant number of those attacks were wire fraud attempts.

All your devices should be running up-to-date operating systems still supported by the developers. This ensures that vulnerabilities get found and plugged before cybercriminals can take advantage of them.

When you invest in software that adds layers of security to your network and firewalls, you put a shield between your employees and the cyber scammers trying to trick them.

Platforms such as CertifID, software like 2FA, and encryption can help you create that barrier by adding extra security steps to the wire transfer process.

Hardware



The last layer of your cybersecurity is the hardware you use. Safeguard your data with an advanced perimeter security system like Cisco or Watchguard. They provide web content filtering, antivirus scanning, advanced threat protection for zero-day exploits, and other features.

Besides 2FA software, there are hardware versions, such as the YubiKey. When using 2FA hardware, should any device be lost or stolen, important information won’t be compromised. The fraudsters would need the YubiKey for authentication.

The overwhelming majority of realtors prefer to communicate by text messages. Securing their devices means adopting mobile device management (MDM) software. “Bring your own device” (BYOD) is a popular trend in workplaces, with 78.48% of organizations reporting BYOD activity in 2018. No matter what your employees do with their devices, MDM software will make sure your real estate company’s data isn’t compromised.

Recovery plans

cup of tea symbolizing recovery from wire fraud

Source: Pixabay.com

Fraudsters usually operate with money chains that don’t lead directly back to themselves. Additionally, the reversal of a wire transfer must be fast to succeed, making the  recovery of funds challenging. Knowing the correct response in the event of a wire fraud attack could mean the difference between retrieval and total loss.

Plan your response before a possible attack can take place. Align your expectations with those of law enforcement, your banking partners, and legal advisors. Assign one person to be responsible for the recovery effort. Should something go wrong, they will be designated to set the recovery process in motion.

Having an appointed response person allows for productive communication instead of disorganized panic. Since wire fraud can happen to anyone on your staff, train everyone on the protocol to follow in the case of a successful attack from cybercriminals.

Have the proper education, processes, and infrastructure in place to prevent wire fraud

The real estate sector has always been a hot target for wire fraud attacks, and that isn’t going to change anytime soon. In 2018, the industry suffered almost $150 million in losses due to cyber perpetrators.

The stark reality is that loss from wire fraud is preventable if you are willing to invest the time and money to improve your company’s security.

Wire fraud prevention can’t be tackled with a single method. The most effective defense is a multi-tiered system, built with layer upon layer of security solutions. With the right education, business processes, and infrastructure in place, everyone involved in your transactions will have peace of mind.

Next in this series are in-depth details on each cornerstone of wire fraud prevention:

Tom Cronkright

Co-founder & CEO

Tom is an accomplished entrepreneur and licensed attorney. He has founded and led award-winning businesses to receive honorable recognition in their respective fields. Tom is also a highly sought-after speaker who lends his expertise to the world of real estate, fraud, and security-related topics across the country.