Amy Gregory has a passion to protect, and when a customer at
Paramount Title was defrauded of $130,000, Amy pulled out all the stops to
track down the funds and then went above and beyond to ensure no customer of
hers would ever fall victim to wire fraud again.
Our story begins with an innocuous email delivered to our
homebyer on June 18, which appeared to come from the lender’s office. The email
informed our buyer that a representative from Paramount Title would call her to
confirm receipt of the funds to close.
Someone called the buyer, but it wasn’t us. A fraudster
named “Jimmy” on the other end of the line confirmed wire instructions for a
specific bank account, with the account name referencing Paramount Title, and
instructed our buyer to send funds in the amount of $130,000.
Our buyer wired the funds.
The following day our buyer checked her account and saw the
wire had been returned to her account. She replied to the email thread with the
fraudster from the previous day asking if she knew what happened and why the
funds were returned.
The fraudster told her the company’s escrow account was
under its annual tax audit and that is why her funds were returned. Then he
gave our buyer new wiring instructions for another bank account. Our buyer
called “Jimmy,” who confirmed the new writing instructions were correct.
Our buyer wired the funds again.
On June 20, our buyer received another email from the
fraudster stating there was an issue with the wire. The fraudster asked our
buyer to call her bank and request a hold be lifted off the wire. Tragically,
our buyer called her bank and obtained the federal reference number for the
The next day a representative from the receiving bank called
to say they flagged her wire transfer and they were not going to release the
funds yet because it looked suspicious.
That’s when our buyer decided to look up the title company. She then called us, the real Paramount Title, and shared her story. Our office confirmed we don’t employ anybody by the name of “Jimmy” – and this was most definitely a case of wire fraud.
This is where Amy swoops into the picture.
Amy was quick to discuss all options for our buyer to report
the crime, including offering to report the issue on her behalf. Amy contacted our
US Secret Service agent (YES, we actually have a US Secret Service agent in our
rolodex to help us in these “special” circumstances), finally reaching him at
10 o’clock at night to discuss the details of the file.
Amy wanted to see if the agent could provide any assistance
on what our buyer could do to get her money back. She conferenced in our buyer,
so she could speak directly with the agent. The agent then offered to call the
“fraudsters” bank and see how they could help.
On June 22, thanks to Amy’s tireless efforts driven by a
passion to protect, the full amount of the wire was returned to our buyer. Our
buyer closed on her home two weeks later.
“I spoke with the client shortly after the ordeal was over,
and she expressed to me how good it felt that someone had her back through the
process,” said Andrea Somers, Compliance Officer for the Florida Agency
Network. “Amy truly goes above and beyond in everything that she does.”
But our story doesn’t end there, because Amy went above and
beyond to ensure no customer of hers would ever fall victim to wire fraud
First, she implemented the website “www.inquirebeforeyouwire.com,”
a message we now we blast everywhere we can. When we receive a new contract, our
customer is informed of this very real threat. When a customer receives an
email from us, they see the Inquire Before You Wire image. It doesn’t matter
how small, or big, the transaction is.
She also implemented additional processes where phone calls
are made to the contacts on each file, to discuss wire fraud, the current fraud
trends being seen in our industry and to lay out exactly how the client will
receive wire instructions.
What’s more, Amy decided to go one step further by achieving
the Certified Anti-Money Laundering Specialist (CAMS) certification. This
achievement demonstrates Amy’s commitment and leadership in protecting our
clients and our industry. Amy feels we have a duty to protect and serve the
Amy’s passion to protect pushes our team to uphold the same
standard of care, to protect and try to prevent tragic situations involving
wire fraud from occurring on our watch again.
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
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
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
- 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.
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.
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.
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.
cyber security and response plan is essential to be prepared, organized and to
execute appropriate and prompt actions when an attack occurs.
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
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.
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
- Whether any lost, stolen, or breached
information has been recovered and if so, how this was done.
- The identity of the source of the
- 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
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.
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.
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:
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
The below comparisons show why you need both cyber-crimes and cyber liability coverage:
Loss of funds (escrow and operational,
personal) due to social engineering and electronic fraud or theft
Fraudulent electronic transfer or
divergence of funds
Employee electronic theft
Cyber extortion (ransomware)
Data breach expenses including legal
costs, fines or penalties
Loss of assets and loss of business
Recovery of systems and forensics;
Economic damages through network
security failure or failure of privacy controls
Consult with your insurance carrier for specific coverage
offerings and cost and weigh the decision that is right for your business and
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.