Wednesday, March 1, 2017

Keep Your Identity Safe in a Real Estate Transaction

Keep Your Identity Safe in a Real Estate Transaction

Don't Let This Person Find Your Private Information
Identity theft is one of the most prevalent crimes in the United States today, with 17.6 million victims in 2014 alone1. The vast majority of the identity incidents reported have been credit card fraud or theft, with the perpetrators attempting to use existing credit or debit accounts. Real estate transactions are especially attractive to thieves because of the nature of the transactions; real estate documents typically involve transmission of personal data, such as a Social Security number, as well as large sums of money.

The majority of real estate agents, brokers, and title insurance agencies are extremely aware of sensitive data passing through their hands and are vigilant in taking measures to ensure the safety of their data. However, hackers and scams are becoming more sophisticated, and there may be holes in data security systems that consumers and agents aren’t even aware of yet. So what steps are available to you to stay safe when buying or selling property in Maryland or anywhere else for that matter?

Secure Online Transfers
Does your agent or your broker use secure file transfer processes? When they are sending documents which may contain your information, are they using a secure system to encrypt data sent over the Internet?

If you don’t know the answers to those questions, it would be a good idea to ask your agent or your broker. As email hacking and phishing becomes more sophisticated, brokers and companies not using secure methods to send and receive sensitive documents could be leaving themselves and their clients at risk to being hacked or having their identity stolen.

Secured Internet Access
Personal information should never be accessed or sent over a public wireless network2. Such networks have been proven to be insecure and place consumers at risk of hacking and even identity theft. Agents, lenders, and brokers should all have passwords placed on their internet networks to maintain security of their network, and the passwords should be changed periodically. Maintaining a secure Internet system that is not open to the public and has at least moderate security is crucial to keeping online transfers secure. It may not matter if a secure file transfer system is used if the Internet network is open to all and vulnerable to being hacked.

Wire Transfer Scams
A very common scam in the last few years has been wire scams. These typically work by thieves successfully hacking a real estate agent or lender’s email account. Then they send wire transfer information for the down payment as if they were the lender/agent/broker. The customer, believing the information to be correct, send the money as instructed. But the transfer instructions were fraudulent and did not go to the lender; instead the money went to the scammers, who get away with the fraud and the money.

There are multiple ways in which to be vigilant against this scam. Lenders, brokers, and agents typically call the other party to confirm the instructions right before any money is sent. This ensures that the money is going to the correct place and is not going to the wrong account. If a customer is the target and receives an email requesting money be wired to a specific place, the best course of action is to call the agent or broker before sending anything. It is better to be vigilant and confirm information than to lose thousands of dollars by sending money to the wrong person.

Shred or Securely File Physical Copies
After the transaction is completed and your property is bought or sold, what becomes of the physical copies? Certainly you have a set of paperwork for yourself, but what happens with the documents kept by your agent or lender?

A common practice is for agents, brokers, and lenders to keep any physical paperwork in a secure storage area. Some offices have gone entirely paperless or nearly paperless, but many others still utilize print copies. Documents that are no longer needed should be shredded using a cross-cut shredder and not left lying around an office or kept in insecure storage areas.

As the consumer, you have the right to inquire how your information is being handled and to ask for an explanation of the process regarding online and physical data security.

1Bureau of Justice Statistics. September 15, 2015.
2Chodorov, Jill. “How to Protect Your Personal Data in a Real Estate Transaction.” April 1, 2014. Washington Post.

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