Fidelity National Financial’s Cyber Attack
Recently, Fidelity National Financial, a Fortune 500 provider of title insurance for buyers and sellers, was hit by a devastating cyber attack.
Fidelity National Financial submitted regulatory documents to the U.S. Securities and Exchange Commission acknowledging the attack on November 21, 2023 and describing how it handles the situation. “Among other containment measures, we blocked access to certain of our systems, which resulted in disruptions to our business. For example, the services we provide related to title insurance, escrow, and other title-related services, mortgage transaction services and technology to the real estate and mortgage industries, have been affected by these measures.”
The next day, AlphV/Black Cat ransomware gang claimed credit.
Fidelity National Financial updated SEC filing
On November 30, 2023, FHF submitted an updated filing to the SEC regarding the attack. “The incident was contained on November 26, 2023. The Company is restoring normal business operations and is coordinating with its customers.” As we write this, a week after FNF initially acknowledged the attack, Fidelity National Financial’s website is finally back online. The company hasn’t said whether it paid a ransom to restart its systems. While its website may be back online, many of its title company and settlement agent services were, at the time, still suffering an outage.
Regardless, the hack compromised the ability for the title company to close deals for its buyer and seller customers following the Thanksgiving weekend. For most people, when you buy or sell a home, you’re closing on the single biggest financial transaction of your life. Having that go awry can cause confusion, concern and even panic.
Financial services companies worry about cyber attacks
The FNF hack also highlights why so many in the financial services industry are increasingly concerned about cybersecurity. On its website, FHF has a link to a page discussing its “Commitment to Helping Combat Wire Fraud” and another to “potentially fraudulent employment offers.”
Top cyber crime: Business Email Compromise (BEC)
Business Email Compromise (BEC) is one way wire fraud happens in real estate. A hacker targets employees of a business. They send phishing emails that look real enough for someone in the business to click on them. The hacker then gains access to that person’s email account, and scrapes it for relevant data. They target buyers or sellers engaging in a transaction. Then, they impersonate someone who works for a business, send fraudulent emails and redirect funds to themselves. It could be the buyer’s closing funds, seller’s proceeds, lender’s funds or broker’s commissions.
Once these funds are steered into the hacker’s account, they’re gone. Typically, those accounts are offshore, or the funds are quickly transferred to crypto accounts in an offshore or untouchable account, then moved again and again. With the price of homes these days, it’s easy to see how millions of dollars could be at risk just from the cash generated by a single day of closings managed by a company like FNF.
FBI says $27.6 billion lost to cyber attacks since 2022
Add it all up, and victims from cyber crime have lost an estimated $27.6 billion between 2018 and 2022, according to the Federal Bureau of Investigations (FBI) Internet Crime Complaint Center (IC3). We think it’s likely more than that.
The FBI’s Recovery Asset Team (RAT) has made progress with stopping these crimes and recovering some of the stolen funds. In the report, RAT initiated the “Financial Fraud Kill Chain (FFKC) on 2,838 Business Email Compromise (BEC) complaints involving domestic-to-domestic transactions with potential losses of over $590 million. A monetary hold was placed on approximately $433 million, which represented a 73 percent success rate.”
Compared to an estimated $27.6 billion in losses, recovering $433 million feels like a drop in the bucket. Especially since the FBI acknowledges the threat of cyber crime is growing. In fact, estimated losses jumped from $6.9 billion in 2021 to $10.3 billion in 2022. We should all be worried about how fast that’s growing.
As we’ve said in the past, you have to protect yourself from cyber crime. Enable two-factor authentication (2FA) on all of your accounts and devices. Pick complex passwords (more than 8 digits, with upper and lower case letters, numbers and characters). Store those passwords safely. Use a password authenticator. Be careful about who has access to your phone. Limit the information you put online about yourself. Regularly check your credit report and score. Set up accounts at Experian, Equifax, and TransUnion and freeze your credit (it’s free). Move as many of your bills online. Regularly check your credit card statement for fraudulent charges. If you’re working on a financial transaction, make sure you go to the right website and work through a secure digital channel.
Most importantly, don’t randomly click on emails or pop-up ads. That’s a fast way to have a hacker crack open your digital and financial life.
Fidelity National Financial’s cyber attack will resolve soon
We assume that FNF will solve its cyber problems shortly, probably before you read this. Closings will then resume. In the meantime, those buyers and sellers affected by the hack will have to have patience. Hopefully, they won’t have issues with their lenders.
Once the dust settles, those affected buyers and sellers will have to sort out any losses they may have sustained by their inability to close on their deal and FNF will have to deal with each of those buyers and sellers when the time comes.
We reached out to FNF for comment for this column but did not receive a reply.
Here’s how to protect yourself from cyber crime like Fidelity National Financial’s cyber attack
©2023 by Ilyce Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency. A1614