Posts Tagged ‘ALTA Wire Fraud Survey Series’

businessman punching and breaking the word RISK

Increased Risk Means We Need to Increase Training

Threats are constantly evolving and your training and testing must also evolve to counter these threats and keep your defense robust.

A cyberattack is a malicious and deliberate attempt by and individual or an organization to breach the information system of another individual or company, seeking benefit from the disruption, ransom, or theft of data.

This electronic threat is increasing in frequency and complexity and has become very expensive to remediate or to recover from.

Here’s the surprise – almost 90 percent of cyberattacks are caused or allowed by human error from the internal staff of the entity attacked.

This includes failure to follow security rules and protocols, sharing passwords, using weak or default settings, and falling victim to social engineering.

Even the large events such as the hacking at Equifax and Target, were caused by failure to follow the rules regarding administrative password settings, human error.

So whether your business is large or small, you need ongoing, strong training and testing to counter the threats.

Recent survey results of a survey of title insurance professionals by the American Land Title Association show a surprisingly small amount of agents are conducting ongoing staff training, and most do it once when they hire an employee.

This is a recipe for eventually becoming a victim of electronic fraud.

There are simple yet effective steps to take to counter the increasing threats by taking a strong defense, and it starts with regular training and testing to remove or reduce the human error element.

Here is what to do to put a training and test plan into action:

  • Ensure new hires are introduced to and educated on information and data security policies and procedures as well as how to protect nonpublic personal information (NPI) and sensitive information. Emphasize to them the “why” so they fully understand the shared responsibility nature. This should be a core part of their orientation and on-boarding.
  • Set and schedule ongoing training for all employees at every level commensurate with the size of the staff and complexity of your business. This should be monthly, quarterly or semiannually.
  • At a minimum, cover controls over access (passwords; pass phrases; multi-factor authentication), network and data distribution (including never using non-secured networks for conducting business such as those in cafes/hotels/airports), phishing and spear-phishing, and never use a general email service like Yahoo or Gmail when sending NPI or sensitive information; social media and social engineering.
  • Require security measures for smart devices (smart phones, and in particular Androids, account for a large percentage of data breaches).
  • Explain the implications of data loss, which includes reputational hits and potential fines and penalties and law suits.
  • Focus on all media forms – hardcopy as well as electronic – and include proper handling and protection from receipt through handling to secured destruction.  
  • Training may be done with internal documents or you may use a third party to conduct the training (i.e. Data Shield; KnowBe4).

  • After the training, use a quiz to gauge how well your employees understood the material.
  • Develop or use a third party to conduct ongoing, regular internal testing such as phishing or spear phishing testing (i.e. KnowBe4 is one vendor who can provide you this tool). Depending on the results, you may then make appropriate changes and re-focus your training to deal with any weak or weaker topics or areas.
  • Provide a single point of contact the employee may turn to with questions or to report any suspected suspicious attempts to obtain information or data (electronic or by phone).
  • Keep records of the training and attendees and testing results. This will be needed to demonstrate good faith, to meet many state requirements – and it’s a best practice.

Last, keep up-to-date on emerging threats and vulnerabilities and provide updated training to employees to be sure they understand new risks or new controls and why they are important; employees must know how to recognize and report threats to stay vigilant.

This will keep your training and testing current and fresh and serve as a continual reminder to your staff. Remember, this is a marathon, not a sprint. Threats are constantly evolving and your training and testing must also evolve to counter these threats and keep your defense robust.

Written-cyber-security-and-response-plans-Just-do-it

Written cyber security and response plans: Just do it

Despite the rising threat, recent survey results show a surprisingly small number of agents are prepared, as most do not have a written cyber security and response plan.

A cyberattack is a malicious and deliberate attempt by and individual or an organization to breach the information system of another individual or company, seeking benefit from the disruption, ransom, or theft of data – and such attacks are increasing in numbers and complexity.

Despite the rising threat, recent survey results show a surprisingly small number of agents are prepared, as most do not have a written cyber security and response plan.

A written cyber security and response plan is essential to be prepared, organized and to execute appropriate and prompt actions when an attack occurs.

The plan does not need to be complex. To be effective, it should be simple and clear and present key information. It should also be built commensurate with the size of the organization.

Key elements of the plan must include:

  • Perform a risk analysis to mitigate all risks, covering administrative, technical, and physical controls. Simply put, this is what could be vulnerable, what could go wrong and what is or should be done to try to avoid or contain the threat(s).
  • The cybersecurity program must protect the security and confidentiality of nonpublic information, protect against threats or hazards to the security or integrity of information, and protect against unauthorized access.
  • Define a schedule for the retention of data and a mechanism for its secure destruction when data is no longer required.
  • Designate an individual, third party, or affiliate who is responsible for the information security program.
  • Be sure existing controls in place – access controls, authentication controls, and physical controls to prevent access to nonpublic information. Encryption (or an alternative, equivalent measure) should be in place to secure data stored on portable electronic devices and for data transmitted over an external network.
  • Identify and manage devices that connect to the network – a simple inventory.
  • Adopt secure development practices for in-house applications if applicable. Alternatively, obtain this assurance from your service provider that performs the development for you.
  • Use multi-factor authentication to prevent unauthorized accessing of nonpublic information.
  • Regularly test and monitor systems for actual and attempted attacks, maintain audit trails, and implement measures to prevent the unauthorized destruction or loss of nonpublic information.  
  • Keep up-to-date on emerging threats and vulnerabilities and provide ongoing training to employees to be sure they understand existing controls and why they are important; employees must know how to recognize and report threats.

The response plan must include the following elements to be effective:

  • Date of the cybersecurity event.
  • A description of how the information was exposed, lost, stolen, or breached,     including the specific roles and responsibilities of third-party service providers, if any.
  • How the cybersecurity event was discovered.
  • Whether any lost, stolen, or breached information has been recovered and if so, how this was done.
  • The identity of the source of the cybersecurity event.
  • Whether you filed a police report or notified any regulatory, governmental or law enforcement agency and, if so, when such notification was provided and by whom.
  • A description of the specific types of information acquired without authorization, which means particular data elements including, for example, types of financial information, or types of information allowing identification of the consumer.
  • Time period during which the information system was compromised by the cybersecurity event.
  • The number of total consumers affected by the cybersecurity event, or a best estimate.
  • The results of any internal review identifying a lapse in either automated controls or internal procedures, or confirming that all automated controls or internal procedures were followed.
  • A description of efforts being undertaken to remediate the situation which permitted the cybersecurity event to occur.

Don’t wait until an event occurs. It’s a chaotic time full of financial and emotional high stress. Do it now and provide yourself the peace of knowing you are prepared.

email threat

Title Industry’s Cyber, Escrow Fraud Preparedness Needs Improvement

A national survey of title agents conducted by the American Land Title Association shows that our industry has farther to go when it comes to formalizing cyber and escrow security plans.

Results of the survey also hint that the threat landscape is becoming increasingly perilous for title agents, consumers and others involved in real estate transactions.

Of the survey’s more than 750 respondents, 63 percent said the number of cybercrime attempts targeting their company increased between 2017 and 2018. Roughly one-third of respondents also observed increases in fraud attempts targeting buyers, sellers and real estate agents over the same period.

Many title agencies have sought to combat the worsening cyber and escrow fraud threat by means of employee awareness.

More than half of respondents said their company reminds employees about the need to remain vigilant on about a weekly basis. More than 25 percent said those employee reminders are made on a monthly basis.

However, more than 20 percent of respondents reported that their company offers no training at all on cybercrime trends or red flags.

More troubling, however, is that despite the apparent increase in fraud attempts, just 62 percent of respondents said their company has a written cybercrime response plan.

Additionally, more than 40 percent of agents were not aware of or have not implemented ALTA’s Rapid Response Plan for Wire Transfer Fraud.

Smaller agencies — those with gross annual income below $1 million — were also somewhat less likely to have formal cyber response plans, wire retrieval plans or training programs than were larger agencies.

Survey results also show that cybercrime insurance coverage among title agents of all sizes is not as prevalent as one might expect given the apparent increase in fraud attempts. More than 27 percent of respondents said their company does not currently have a cybercrime insurance policy.

While most industry participants have made strides when it comes to protecting escrow funds and sensitive information, the survey clearly shows that gaps remain.

The survey also provides an opportunity for all of us to redouble our efforts, particularly when it comes to formalizing cyber response plans.

To help, we’ll be posting a blog series in the coming weeks that will provide simple, actionable tips for improving and formalizing response plans, as well as plans for wire retrieval and staff training.

We’ll also talk about the importance of cyber insurance and provide insight on how to get the right coverages for your business.

In the meantime, check out the growing library of cyber fraud resources on the Alliant National Education page. Alliant National agents can also watch our brand new Texas Continuing Education webinar on information and escrow security.

Are you covered

Cyber Insurance: Yes, you absolutely need it.

Cyber insurance is now critical to help protect your business.

Cyber attacks are becoming more frequent, clever and complex. Cyber insurance is now critical to help protect your business from major expenses, business loss, and regulatory fines and penalties.

General liability umbrella policies typically do not cover cyber events (Target’s insurance policy only covered 36 percent of its $252 million data breach costs).

This insurance comes in many different variations and costs, so it is important to know what product works best for you, considering and balancing coverage and cost.

Four key elements comprise essential coverage to protect against data breach and loss of customer data:

  • E&O
  • Liability
  • Network Security
  • Privacy

What is most important is that both cyber-crimes and liability are included in your coverage.

The policy may be a standalone, or a rider on to your existing policy. Always buy the most compressive coverage available that you can afford.

Here is why that is so important:

Broad coverage includes both first and third-party coverage. First party only covers your business, while third party will cover the claims against you from customers or clients as well as related damages and court costs.

The below comparisons show why you need both cyber-crimes and cyber liability coverage:

Event Liability Coverage Crime Coverage
Loss of funds (escrow and operational, personal) due to social engineering and electronic fraud or theft No Yes
Fraudulent electronic transfer or divergence of funds No Yes
Employee electronic theft No Yes
Forgery No Yes
Cyber extortion (ransomware) No Yes
Data breach expenses including legal costs, fines or penalties Yes No
Loss of assets and loss of business income Yes No
Recovery of systems and forensics; reputational damages Yes No
Economic damages through network security failure or failure of privacy controls Yes No

Consult with your insurance carrier for specific coverage offerings and cost and weigh the decision that is right for your business and budget. Remember, the broadest form of coverage will best protect you and your business so while it may be more expensive, your business will be better protected against the risks we face in today’s business environment.

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