BEC Fraud Nears $3B Mark In 2023 In Latest IC3 Report
Calling cybersecurity “the ultimate team sport,” the FBI’s Internet Crime Complaint Center (IC3) emphasized its ongoing commitment to working with local law enforcement and private industry to combat evolving cyber threats in the U.S. in its recent 2023 Internet Crime Report.
The report, released in March, highlighted investment fraud and business email compromise (BEC) fraud as the two most expensive fraud types in 2023, with investment fraud increasing from $3.31 billion in 2022 to $4.57 billion in 2023 — a 38% increase, and BEC logging 21,489 complaints amounting to $2.9 billion in reported losses.
“Today’s cyber landscape is threatened by a multitude of malicious actors who have the tools to conduct large-scale fraud schemes, hold our money and data for ransom, and endanger our national security,” the FBI noted in its executive summary. “The FBI continues to combat this evolving cyber threat. Our strategy focuses on building strong partnerships with the private sector; removing threats from U.S. networks; pulling back the cloak of anonymity many of these actors hide behind; and hitting cybercriminals where it hurts: their wallets, including their virtual wallets.”
IC3’s Recovery Asset Team (RAT), established in 2018 to facilitate the freezing of funds involved in cybercrime, was able to initiate the Financial Fraud Kill Chain (FFKC) on 3,008 incidents in 2023, with potential losses of $758.05 million. A monetary hold was placed on $538.39 million, representing a success rate of 71%.
In its report, the FBI emphasized the importance and value of victims reporting cyber incidents to IC3.
“Your reporting is critical for our efforts to pursue adversaries, share intelligence with our partners, and protect your fellow citizens,” the FBI noted. “Cybersecurity is the ultimate team sport, and we are in this fight together.”
For professionals involved in real estate transactions, RAT is a significant ally, as the organization has developed the deep insight and resources needed to identify, track and convict cyber criminals.
By creating a strong liaison between law enforcement and financial institutions, RAT is able to assist in the identification of potentially fraudulent accounts, stay at the forefront of emerging trends, and foster a symbiotic relationship where information is shared.
New concerns emerge
The IC3 report noted increasing concern for situations where fraudsters prompt victims to send wires directly to third-party payment processors. Funds are quickly dispersed in such cases, making it more difficult to recover the money.
The FBI is also seeing an increase in fraudsters using custodial accounts at financial institutions or cryptocurrency platforms, where the funds are quickly swallowed up.
“With these increased tactics of funds going directly to cryptocurrency platforms and third-party payment processors or through a custodial account held at a financial institution, it emphasizes the importance of leveraging two-factor or multi-factor authentication as an additional security layer,” the agency noted. “Procedures should be put in place to verify payments and purchase requests outside of email communication and can include direct phone calls but to a known verified number and not relying on information or phone numbers included in the email communication.”
Other best practices include:
- Carefully examining the email address and URL
- Reviewing the wording and spelling in the correspondence
- Refraining from clicking on links requesting you update or verify account information
- Refusing requests to supply login credentials or personal information via email
- Training employees on the red flags of fraud
- Providing staff with ongoing training on how to handle suspected fraud
Wire fraud guidance
As in past years, the FBI reminded real estate professionals involved in wiring funds to put in place strict verification measures should a wire change be requested during the course of a transaction.
In addition, the FBI emphasized the critical need for title agents who are victims of wire fraud to act quickly when the fraud is detected, advising they contact the originating financial institution to request a recall or reversal and a Hold Harmless Letter or Letter of Indemnity.
They also encouraged victims to file a detailed complaint with www.ic3.gov providing as much data as possible to broaden the organization’s ability to track cybercriminals.
Ransomware on the rise
Ransomware incidents were also on the rise in 2023, with 2,825 complaints reported and losses up 74% from $34.3 million to $59.6 million.
In its report, the FBI emphasized that it does not encourage paying the ransom since it will effectively embolden criminals to target more victims.
“Paying the ransom also does not guarantee that an entity’s files will be recovered,” the FBI reminded. “Regardless of whether you or your organization decided to pay the ransom, the FBI urges you to report ransomware incidents to the IC3. Doing so provides investigators with the critical information they need to track ransomware attackers, hold them accountable under U.S. law, and prevent future attacks.”
At Alliant National, we are committed to keeping you updated on the latest cybersecurity threats and providing you and your staff with information and tools to help protect your customers and your agency. SecureMyTransaction from Alliant National is an advanced fraud prevention solution built exclusively for independent title professionals. The system helps agents avoid risks posed by wire fraud, identity fraud and vacant property fraud by automating the information you need to move transactions forward with confidence. SecureMyTransaction leverages AI technology that covers and crosschecks:
- Identification
- ID instrument validation (US and 200 countries)
- Bank account validation and ownership
- Payoff and proceeds verification
- OFAC searches (FinCEN included in the OFAC feed)
- Alliant National Underwriting alerts
Learn more at www.securemytransaction.com or contact your agency representative to schedule a demo.
Tags: crime, cybersecurity, fbi, fraud