NAR Addresses Risk Management Issues – Cyber and Data Security
On November 3, 2017, the National Association of REALTORS® (NAR) Risk Management Issues Committee (RMIC) met in Chicago, IL to discuss issues affecting REALTORS® across the country.
The meeting was attended by all five of Arizona’s committee representatives: Bill Ashker, Holly Eslinger1, Nicole Hamming, Marge Lindsay and J.T. Tsighis.
Disclosed at the committee meeting were the “top risk issues” identified by NAR following a nationwide survey that it conducted. Survey results included three issues accounting for a majority of the concerns.
Part Three: CYBER/DATA SECURITY
By 2019, cybercrime is projected to cost businesses an estimated $2 trillion annually.
The seriousness of this issue was summed up by NAR RMIC member J.T. Tsighis who stated, “In over 45 years as a REALTOR® and long-standing member of the Risk Management Committee, I can’t recall experiencing a threat to our industry as serious as cyberfraud and cybercrime.
“Sophisticated hackers, scammers and cyber criminals have the potential to put us out of business, and destroy consumer confidence and lives, when it comes to buying and selling real estate. It is up to each and every one of us to be vigilant and acutely aware of the devastating impact it can have on the customers and clients we serve. We can minimize risk and negative outcomes when all of us take this matter seriously.”
In Chicago, the RMIC discussed the implementation of best business practices to safeguard agents and their clients from online criminals. A critical part of such practices must include communication and education from the very start of each transaction.
All parties should be made aware of the threat of wire fraud, red flags that may signal a potential threat, and secure email practices that should be followed throughout the transaction.
Perhaps the most important message to convey is to inform parties that if they receive an email containing wire transfer instructions, they must immediately call their escrow officer to ensure the validity of the instructions. It is imperative that this call be made to a number obtained in person from the individual or through other reliable means, not from a phone number provided in the email or the wiring instructions.
To assist agents in educating their clients about the risks of wire fraud, Arizona REALTORS® has prepared a downloadable Wire Fraud Advisory.
For REALTORS® interested in attending a future meeting of NAR’s RMIC, the next one will take place in Washington D.C. at the REALTORS® Legislative Meetings & Trade Expo in May 2018.
1Holly Eslinger currently serves as vice-chair of the NAR Risk Management Issues Committee and will serve as chair in 2018.