Protecting potential victims from fraud is in the spotlight, as many people are unaware of the dangers they face on a daily basis in online transactions and communications.
After increasing by over 300% during the pandemic, cybercrime is emerging as one of the biggest threats to businesses globally – and the real estate industry is no exception, says Jackie Smith, Head of Buyers Trust – a subsidiary of the Ooba group.
Every 32 seconds, a hacker defrauds someone online. This equates to cybercrime committed approximately 2,244 times per day, with small businesses considered to be the most vulnerable to these attacks.
Smith believes these statistics will get worse. “Unfortunately, this will only get worse as criminals become more sophisticated and people continue to work from home, leaving them without the advanced protection of their workplace’s internal security infrastructure.”
“We are particularly concerned about the impact this type of crime – particularly phishing scams – will have on the local real estate industry, where many real estate agents work from home or on the go.”
Smith said that once an offer to purchase has been signed and the bank has approved a home loan, the process of transferring ownership can begin. “Real estate agents or transfer attorneys are responsible for handling the buyer’s deposit and have limited security measures in place to protect these onerous transactions,” she said.
“We have heard of various incidents where buyers have lost their deposits due to phishing scams. This ultimately derailed their dreams of home ownership due to poorly secured depository accommodation.
Email communications make agents vulnerable to phishing
Smith said that the most common type of cybercrime encountered by real estate agents is phishing: a cybercrime perpetrated by individuals or groups who contact potential victims posing as legitimate institutions to trick them into providing private data, such as bank and credit card information, passwords, or personal identification information.
“These types of crimes commonly and easily occur when email recordings between the agent, the buyer and the respective lawyers to whom the bond is posted are intercepted and ultimately ‘phished’,” she said.
Cybercriminals will hack into the property or real estate company’s system to study the language used, information format and transactions, to make sure they appear informed and legitimate to commit convincing fraud.
Can you afford to risk it?
Recognizing the need to bring South Africa to international best practices in the fight against cybercrime, the President recently enacted the Cybercrime Law.
While this law aims to provide greater protection for potential victims and greater consequences for cybercrime perpetrators, it also means that real estate agents who fall for phishing scams can be viewed as unwitting accomplices to the crime. and therefore held accountable.
“Realtors need to be aware that they bear enormous legal responsibility when accepting a deposit from a home buyer. In fact, they could be held responsible if that money is lost due to their inability to implement the necessary security protocols, ”Smith said.
Smith explains that for realtors and home buyers to protect themselves and the security of the deposit, they have two options.
“The first is to follow the best practice security protocol. This should include not sending bank details by email, using strong passwords, not opening suspicious links, calling the agent or the buyer to confirm that the communications by e- mail originates from them, not to conduct financial transactions over open Wi-Fi networks, and to ensure that you have the latest antivirus and malware software installed on your devices.
However, even following the strictest cybersecurity measures, protection against the threat of cybercrime is not 100% guaranteed. Human error is the leading cause of 95% of cybersecurity breaches, according to IBM research, and most agents and buyers lack the professional training necessary to detect sophisticated attacks.
For this reason, Smith recommends that homebuyers and real estate agents remove the “human element” from the process and instead use a highly secure third-party alternative such as Buyers Trust to protect a deposit.
‘Full visibility of the deposit at all times’
“Homebuyers have the choice of selecting the financial services provider they wish to invest their deposit with when signing the offer to purchase,” Smith said. By choosing Buyers Trust, home buyers have 100% visibility of their deposit at all times, including the return on their initial investment and the knowledge that the highest level of security is in place.
Buyers Trust works by creating a bank account with some of the major banks in the country in the buyer’s name, to which the buyer can directly transfer the deposit, giving them access to a free bank guarantee without the high price tag.
“It is unrealistic to expect homebuyers or real estate agents to turn into cybersecurity experts overnight and with criminals using increasingly sophisticated methods both sides remain vulnerable . Removing the human element from this process is the surest way to protect yourself against cybercrime, ”said Smith.
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