If an escrow agent wrongly sends money to a cyber criminal, the agent will probably be liable for the loss. But what if one of the parties to the escrow, the buyer for instance, is duped by a cyber scam? Is the escrow company on the hook for that? A buyer in Wisconsin says yes. Continue Reading Home Buyer Falls for Cyber Scam, Sues Closing Agent
According to the FBI, in 2016, incidents of cyber fraud in the real estate industry shot up by 480%. Criminals somehow figured out the real estate process around that time and have been wreaking havoc ever since. So, as they say, there are two types of businesses: ones that have already been hacked and ones that will be. If fraudsters make off with your escrow money, here is what you should do to control the damage. Continue Reading When Hackers Steal Your Escrow Money
Cyber fraud is quickly becoming real estate professionals’ worst nightmare, causing millions of dollars of damages each year. Part of your strategy for defending against cyber crimes should include proper insurance coverage. Because cyber insurance is a relatively new product and constantly evolving, you should take time to learn about the different types of policies that are available and which are particularly suited to the real estate industry. Continue Reading Cyber Insurance Policies for Real Estate Professionals
Recently, some companies have dodged potential class liability by forcing would-be plaintiffs into arbitration. Other businesses have “picked off” class adversaries by paying them individual damages. Can those strategies be successfully combined? Continue Reading Improve Your Arbitration Clause Through Notice-and-Cure Provision
Nowadays, a crook can steal infinitely more money with a laptop computer than a gun. Hardly a week goes by without news of some large company’s computers being hacked. Given the real estate industry’s increasing reliance on internet commerce (and the seeming inevitability of e-closings), it was only a matter of time before cyber criminals turned their attention to home sales. Now, they have. Continue Reading Internet Thieves Target Escrow Industry
Hardly a week goes by without word of a new corporate data breach. Until now, most affected businesses have dodged potential class liability, successfully arguing that customers suffered no compensable harm. Last month, a federal appellate court in Chicago rejected those arguments. That decision, Remijas v. Neiman Marcus Group, threatens data-intensive industries, like real estate, with massive losses.
Remijas involved the 2013 data breach at Neiman Marcus, the luxury retailer. Hackers supposedly stole credit card information for 350,000 Neiman Marcus customers, at least 9,200 of whom fell victim to fraudulent charges. Like day follows night, several class actions were filed by shoppers claiming they lost time and money dealing with bogus transactions and the increased risk of identity theft.
The U.S. Constitution requires that would-be plaintiffs have standing—that is, the suffering of a concrete harm, caused by the defendant, that is capable of redress. The lower court in Remijas found that the shoppers’ alleged injuries were too speculative and abstract to meet standing requirements. On appeal, the reviewing court disagreed. Even if Neiman Marcus customers have not yet suffered money damages, the appellate court ruled, those individuals now face a substantial risk of injury at the hands of cyber criminals. That does satisfy standing, the court held.
Remijas bodes ill for the real estate industry, which has eagerly adopted nearly every form of electronic innovation and is on the verge of e-closings. Each real estate closing involves loads of sensitive personal information, from social security numbers, to financial data, to birth dates, to bank routing numbers. That represents a goldmine to hackers, especially considering that most real estate companies lack sophisticated security systems and therefore are soft targets.