Best Practices for Securing Your 1031 Exchange
In today’s rapidly changing digital age, criminals are using sophisticated techniques including artificial intelligence to steal the funds of companies and individuals.
Since real estate transactions involve the wiring of monies, cybersecurity has become a critical concern for owners and investors. Fraud and scams are becoming increasingly sophisticated and harder to detect, making vigilance more important than ever.
Unless investors and property owners use a 1031 Qualified Intermediary that has state of the art safety protocols, 1031 Exchanges, which allow investors to defer capital gains taxes on property sales by reinvesting in similar properties, may also be vulnerable to cyber threats.
Findings from our recent American Fraud and Identity Theft Statistics 2024 report highlight the alarming rise in scams, with nearly 1 in 3 Americans having been scammed in the last 12 months alone. These statistics underline the importance of vigilance among investors and all parties involved in 1031 Exchanges transactions.
Latest Cyber Threats to Be Aware of
- Phishing attacks
- BEC – business email compromise
Phishing attacks, where cybercriminals employ deceptive emails and AI-generated content to trick recipients into revealing sensitive information or clicking on malicious links, can be a significant threat to 1031 transactions. AI-generated emails and cloned voice and video content that mimic and impersonate trustworthy sources continue to intensify the depth and sophistication of phishing.
Business email compromise (BEC) schemes are also escalating. BEC schemes involve hackers gaining access to email accounts and manipulating transactions for financial gain. Given that more than 40% of Americans receive suspicious communications daily but only 44% report them, awareness and proactive measures become even more critical.
Tips to Stay Ahead of Cybersecurity Risks
- Use strong passwords and change frequently.
- Enable Multi Factor Authentication (MFA) on your online accounts including email, financial, social media platforms.
- Be cautious and skeptical of emails requesting sensitive information. Phishing emails may contain typos or appear threatening. If something seems suspicious, report the email as phishing or junk.
- Avoid clicking on unfamiliar links or opening unexpected attachments.
- Keep your software updated to ensure your systems and devices have the latest security measures.
- Report identity theft immediately if your accounts or personal information have been compromised.
- For your 1031 Exchanges, select a Qualified Intermediary that is knowledgeable, informed and vigilant with proactive protections in place to thwart cybercriminal activities.
A Qualified Intermediary is responsible for holding your funds during a 1031 Exchange. Surprisingly, there are no federal requirements regarding the security measures that Qualified Intermediaries must have in place for the monies they hold for their customers. IPX1031 has implemented protective measures to safeguard your real estate funds.
Safeguard Your Real Estate Funds with IPX1031
IPX1031 Security Measures
IPX1031 employs various security measures, including a secure electronic document-signing platform to help prevent potential fraudulent activities in exchange transactions.
IPX1031 Financial Assurance
IPX1031 is a Fidelity National Financial company (NYSE:FNF). As part of a Fortune 500 Company, IPX1031 provides sophisticated technologies to protect your funds. These protections are backed by a $100 million Fidelity Bond and a separate $50 million Written Performance Guaranty. Click here to see our full umbrella of coverage.
For more information about cybersecurity, please visit https://www.cisa.gov/national-cyber-security-awareness-month
Read more here:
American Fraud and Identity Theft Statistics 2024
Cyber Fraud – an Emerging and Worsening Threat
Are Cybercriminals Targeting Your 1031 Funds?
Scam Struggle: 1 in 3 Americans Victims of Identity Theft
Fraud and Identity Theft: Cities and States Hit Hardest by Scams
Your 1031 Funds Are Safe
Simple Steps to Boost Your CyberSecurity
Safety and Security for Exchangers
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