By: Jamie Kosofsky
2022- I am not sad to see you go. The industry is in bad shape, interest rates are high, but that will correct itself, or should I say, it is a correction in and of itself. I am not an economist, and I will leave the forecasts to them. The one word which really made 2022 an incredibly challenging year has five letters: FRAUD. For years we have been discussing it, planning for it, trying to avoid it. We have dodged some bullets in the past, but 2022 was the year it hit us right between the eyes, and there is not a damn thing we can or could do about it.
The threat landscape we face in our industry today is like nothing I have seen in my 25 years of practicing law. We have spent millions on security, countless hours of preparation, we have tech solutions, we have scanners, we have firewalls… but I’m going to put it out there, clear and with absolutely no filter.
There are tools available in our industry to protect our client’s information. There are protocols we could follow to make sure that our consumers information is protected. The problem is that our industry is driven by the bottom line and the need to catch business at all costs. The bad guys have figured out this industry and they know how greed, being pennywise and pound-foolish sets us up for disaster. We can control this, but we need to be professionals and protect our customers, even if it takes longer or costs more.
Our firm is among the most secure entities in our space. We have studied the security and risk landscape, we have followed SOC 2 protocols for seven years, and we still got hit by a fraudster. Was it a hit on B&K? NO, it was a situation where the fraud was complete before it even hit my system. The bad guys, got to the client before we could protect them. They targeted the unsuspecting real estate agent/broker and did a hell of a job making it look real. As a result, there are parties who may lose an incredible amount of money. Why? Because not everyone in the transaction is willing to do the right thing. The bad guy understands the laziness of the human animal. Until we fix it, and make the consumer realize the danger, the bad guys will just continue to watch for the laziness and unwillingness to invest in the proper protections and protocols.
Whether you are an attorney, real estate agent/broker, lender, or notary, the onus is on you! You may not see the result down the road from a lack of diligence, but you need to understand what is at stake. Compliance is not optional, in 2023 it should be centerstage. Make it your resolution to take the threat landscape seriously in 2023. Your clients will appreciate it!
