Title Insurance and Cybersecurity: Prevention Is Better Than Cure

3 Ways to Prepare and a Pivot to Consider

"Wire and title fraud risk reached an all-time high in Q4 2023 with 51.8% of transactions having issues that led to a risk of wire and title fraud," according to FundingShield's quarterly report. Last year, some prominent firms fell victim to real estate cyber-attacks, with phishing and spoofing attacks rising. In particular, Business Email Compromise (BEC), a sophisticated blend of phishing and spoofing, has seen a 27% increase in the Real Estate sector over the past three years, according to the government's Internet Crime Complaint Center, which collects data on title and real estate company cyber attacks.

Be proactive rather than reactive. Here are 3 key steps to safeguard your firm:

1. Email and Password Hygiene: Prioritize staff training for good email habits, such as avoiding unknown attachments or links, using strong, unique passwords, and conducting business only on secure networks.
2. Enhanced IT Security: Maintain updated antivirus software and firewalls, perform regular system backups, and ensure app legitimacy before downloading. Ensure your team follows policies in place and consider the legal impacts of cybersecurity on your consumer.
3. Legal and Insurance Measures: Collaborate with your attorney on a written disclosure regarding potential title cybercrime risks to clients. Review your insurance for cyber coverage, considering products like social engineering fraud endorsements and computer and electronic crime riders.

Everyone's Email Nightmare.

Returning from a long weekend to find a cluttered inbox can be overwhelming. You have a meeting scheduled for 9:00 AM, so you quickly start skimming through your emails, trying to reach "inbox zero."  In the process, you click on a link in an email, only to realize later that it was a mistake. This is exactly what hackers are waiting for an opportunity to load your inbox and system with spyware. Most cyber frauds happen because of accidental security slip-ups by well-intentioned employees. Email viruses can infect your system's software and compromise your operational security.

Looking to Close The Loop on Cyber Intruders? 

Have you considered adopting a unified digital closing platform? You can utilize one platform for all your needs rather than dealing with multiple applications and use scenarios for your documents and closings. Qualia is an example of such a platform that is used widely. It commissions regular audits by independent third-party consultants to ensure the safety and security of your data. This way, you can check data security off your to-do list.

Prevention is Better Than the Cure

Your employees' heightened awareness, application monitoring, and calculated risk communication to consumers form the backbone of any effective cyber monitoring program. Migrating to a trusted online platform could yield bountiful returns in customer service, efficiency, and cyber security for your real estate and title company.

As the adage goes, prevention is better than cure. This is especially true when cyber threats to the real estate and title market continue to loom more significant than ever. Be vigilant, maintain your preparations, and use your available resources to combat fraud and maintain cybersecurity.