How Home Buying is Vulnerable to Hackers

May 30, 2017 at 9:16 am Leave a comment

Hackers are using increasingly sophisticated methods to infiltrate themselves into the home buying process with potentially disastrous results for the home buyer.

Specifically, hackers are using email information stolen from realtors, closing attorneys, title companies and other individuals who are part of the home buying process to send out last second requests to anxious homebuyers to wire needed funds. By the time parties realize that the email request was bogus, their savings have been transferred with little hope of recouping the loss. The scam is described in detail in this blog. A friend of mine told me about this occurring in Putnam County, New York, and I think it’s worth giving people a heads up.

New York State has taken a lot of criticism for its Cyber Security Regulations, but one of its baseline requirements is that insurance companies and banks encrypt email in transit as well as make sure that it is adequately protected when it is being stored. This makes a heck of a lot of sense. Legislatures on both the state and federal level should consider making this a baseline requirement for all companies.

Increasingly, mortgage companies are having members feed information directly into secure websites; again this makes sense. The more information can be uploaded directly from a consumer to a secure website without email exchange that is vulnerable to being hacked, the safer we all are. Needless to say, consumers should be skeptical of any email request for sensitive information. It is just too easy to mimic legitimate businesses with logos, etc.

Finally, we have all grown numb to reports of cyber breaches at places like Yahoo. We may check our bank statements for a couple of months, but when we see no unusual activity we continue about our day thinking that we have dodged a bullet. In reality every time you hear about a breach, whether or not it has cost you money, it means that hackers have more information to develop an increasingly sophisticated hacker profile.

This scam provides a perfect example of why this is so dangerous. The hackers knew how to replicate the profile of the small real estate businesses and patiently waited to entrap individuals they knew were looking to purchase homes. They even knew when the homebuyer would be most vulnerable to last second request for closing funds after watching a sting of email exchanged between realtor and buyer.

 

Entry filed under: General.

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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