For those of us with a vested interest in reducing the number of internet-based crimes, last year’s Internet Crime Report is a sobering reminder that there’s still much work to be done, both in educating consumers and in safeguarding their interests. Here are some of the most important takeaways from the FBI’s 2020 Internet Crime Report.
More About the Internet Crime Complaint Center (IC3)
Before we dig into the Internet Crime Report, let’s talk about the Internet Crime Complaint Center, also known as the IC3. The IC3 was created by the FBI in response to the rise in online scams; it gives the general public a reliable source of information about internet crimes and a place to report these schemes. With this information, the IC3 creates annual reports to educate consumers and forecast trends to alert the public to both emerging and ongoing cyber threats. All of the annual reports can be found here: https://www.ic3.gov/Home/AnnualReports
The 2020 Internet Crime Report By the Numbers
Business email compromise (BEC) / Email account compromise (EAC) continues to be the most significant cause of losses. In 2020, the IC3 received 19,369 BEC/EAC complaints, with adjusted losses of over $1.8 billion. That means almost $100,000 is lost per incident. In the title insurance industry, we’re all quite familiar with this scam, which often involves compromising legitimate email accounts through social engineering or hacking and requesting the transfer of funds to fraudulent bank accounts, although this type of scam is used in a number of different sectors.
Encouragingly, there has been a 19% decrease in the number of BEC/EAC victims this past year compared to 2019. However, the total amount lost has increased 5% year-over-year and the average loss per victim has increased 29% year-over-year. While the recovery of assets has also increased during this time period, it still lags behind the staggering losses incurred in 2020. It’s also important to remember that these statistics are only based on the internet crimes that were reported to the IC3; many victims do not file FBI reports.
Business email compromise is the most costly internet crime, but by no means is it the only internet crime. Here are some more statistics from the 2020 IC3 report:
- 2,000: complaints received per day, on average
- 440,000: total complaints per year, on average (over the last 5 years)
- 2,211,396: number of complaints reported in the last 5 years
- $4.2 billion: victim losses in 2020
- 23 percent of victims are over the age of 60
- The top 5 crimes by total losses in 2020 are BEC/EAC, Confidence Fraud/Romance, Investment, Non-Payment/Non-Delivery, and Identity Theft
- California, Florida, Texas are the 3 states with the highest victim counts
Real Estate Fraud
If we zoom in on the real estate sector specifically, the numbers aren’t any more encouraging. There were 13,638 victims of real estate fraud in 2020, with $213,196,082 in reported losses. The amount lost represents only a 4% decrease from 2019, which means scammers are continuing to find new ways to trick hard-working Americans into wiring them tens of thousands of dollars—and they’re getting away with it.
Over the last 5 years, there have been 58,834 victims of real estate fraud with losses totaling $688,127,205. Keep in mind these numbers only include the losses that are actually reported to the IC3. Far too often real estate fraud victims are too embarrassed to report it – especially if there is no hope in recovering the funds.
Why are real estate transactions so fraught with peril? The fact that they involve large sums of money certainly doesn’t help, nor does the fact that there are a number of different parties involved in the process, each of which can have their communications compromised. Then there’s the emotional factor—purchasing a home is a high stakes transaction and buyers are willing to jump through all kinds of hoops to ensure that the deal goes through. Because purchasing a home isn’t any every day—or even every year—occurrence for most of us, it’s easy to forget what each step of the process should look like.
Steps You Can Take to Protect Your Customers
As a title company, it might not be a legal obligation to protect your customers, but it is your moral duty to take the necessary steps to secure the closing process. Customer education can only go so far when scammers are becoming increasingly sophisticated in their schemes.
Closinglock protects your customers from social engineering, email spoofing, clone phishing, email hacking, imposter fraud, and compromised accounts. We secure more than $2 billion in transactions each month and our products are trusted by a number of industry leaders, including Bank of America, US Bank, Fifth Third Bank, and USAA.
Learn More About Closinglock
To learn more about how Closinglock can help you better serve your customers, contact us today or get started with a live demo of our services.