The financial services industry must be on the lookout for scams and cybercrime and consider ways to reduce risk, according to mortgage brokers Aaron Bell and Brenden Lowbridge, as new data shows digital ad scams are on the rise.
“It poses a massive risk to us, financial and otherwise,” said Brenden Lowbridge (pictured above left), director of Newcastle brokerage Money Links. “Most importantly, people’s information that they have obviously trusted with us is at risk.”
Global ad fraud has become a $127 billion problem, according to Australian online security company TrafficGuard, with financial services a particular target.
Overall, the federal government received over 76,000 cybercrime reports last year, with the average cost per cybercrime report reaching more than $39,000 for small business and $88,000 for medium businesses, according to a report by the Australian Cyber Security Centre (ACSC).
Aaron Bell (pictured above right), director of brokerage Home Loan Village said it was important for brokers to look for ways to reduce the risks of these scams and cybercrime in general before it was too late.
“Obviously insurance gives peace of mind, but the preference should always be to have the rules and protocols in place to mitigate against ever having to use that insurance,” Bell said. “Those who make claims on their insurance for cyberattacks will still have a highly stressful and painful imposition on their time and business.”
Reducing the risk of digital ad scams
While attacks like ransomware get the headlines, a little-known risk for mortgage brokers is online scams.
But with businesses losing an average of 15%-20% of their budget to these schemes, Mathew Ratty, CEO of TrafficGuard, said the financial sector should pay attention.
“Finance sector advertisers should be aware that up to 20% of clicks on ads or campaigns can be fraudulent,” Ratty said. “Considering the enormous impact of ad fraud and invalid traffic, the banking finance industry is gloriously attractive and a sitting duck for bad actors looking to take advantage wherever possible.”
Click fraud appeals to bad actors due to the potential financial gains, and it is a common form of ad fraud that involves bots, click farms, or false websites.
TrafficGuard said it could lead to inaccurate figures on click-through rates and customer acquisition costs, making it hard for business owners to understand if they have run a successful ad campaign.
To combat this risk, TrafficGuard has released security software that can determine real traffic from fake. “It’s important that businesses thoroughly understand exactly what detection software is available and measure the offerings accordingly,” Ratty said.
Lowbridge, who won Regional Broker of the Year at the 2022 Australian Mortgage Awards, said he was open to exploring options for new software or technology to reduce the risks of cyberscams.
“Like many other brokerages, we’re a paperless office now. I guess that means you’ve got to rely on your software,” Lowbridge said. “From what I’ve learned is that it’s not just big companies that are being targeted. And it’s not just one big attack but lots of consistent small ones.”
Bell agreed, saying that Home Loan Village had enlisted an IT company to oversee their computers and maintain protection. Another measure the business had taken was to move across from Google Suite to the Microsoft Office 365 suite.
“I am definitely no expert but from what I can tell and talking with experts in the industry these two moves would be the first to take if someone hadn’t already taken them to reduce digital scams,” Bell said.
Strategies for broker-specific risks
Another digital risk that brokers face is the potential for settlement transfers to being exploited, according to Lowbridge.
“So many solicitors now are hesitant not to use their trust account. And then it comes back to the broker to in many cases coordinate that. A transfer into the client’s own shortfall account is obviously the best practice – at least in our opinion,” he said.
“But in some cases, we’ve had situations where a clients had to transfer a large sum of money into the bank’s legal teams trust account and other avenues like that.”
Since these transfers could easily be exploited by hackers, Lowbridge said he had implemented some “pretty clear policies and procedures” for his brokerage staff.
“Fortunately, there’s only 11 of us and so it’s pretty easy to get that across in a team meeting. We make sure that we are consistently having dialogue around the issues of scams that could affect us or our clients,” he said.
