Real Estate Is the #1 Target for Wire Fraud: Joe Erle on Cyber Insurance & Protecting Transactions

Joe Erle – C3 Cyber Insurance (00:00)
Yeah, it’s not retail, it’s not healthcare, it’s not financial services, it’s real estate. And most investors have no idea until it happens to them. There’s some startling statistics that since the advent of AI, phishing emails have gone up over 1200%. ⁓ Voice phishing, where they ⁓ fake somebody’s voice has gone up.
think 442%. So we are in the crosshairs as real estate people for these cyber criminals.

Michelle Tack (02:06)
Hi everyone, I’m Michelle Tack. Welcome to Real Estate Pros podcast. I’ve got a really interesting ⁓ operator today named Joe Erle that focuses on cyber insurance. Joe, do you want to just give a shout out to the team?

Joe Erle – C3 Cyber Insurance (02:22)
Hey everyone out there, Joe Erle with C3. Nice to meet you all.

Michelle Tack (02:26)
Joe and I spent some time preparing for this podcast, obviously. And one of the things I thought was really interesting of what Joe does is that he helps organizations that do volume of transactions around real estate and ensures that if there is an issue with a hack, what have you, that you have a capability to be insured.

Joe, that’s a unique offering that you have ⁓ as a service, and we’re thrilled to have you on, particularly in ⁓ what’s happening just overall in high tech. So can you talk a little bit about, for those that don’t come from that world, about more specifically what you do and what markets you serve, please?

Joe Erle – C3 Cyber Insurance (03:15)
Absolutely. Well, C3 serves every market, ⁓ you would have to, if I were to ask you, Michelle, what sector do you think is the number one as far as wire transfer fraud?

Michelle Tack (03:30)
I don’t know, but I think it might be real estate.

Joe Erle – C3 Cyber Insurance (03:32)
Yeah, it’s not retail, it’s not healthcare, it’s not financial services, it’s real estate. And most investors have no idea until it happens to them. There’s some startling statistics that since the advent of AI, phishing emails have gone up over 1200%. ⁓ Voice phishing, where they ⁓ fake somebody’s voice has gone up.

Michelle Tack (03:37)
Yeah?

Joe Erle – C3 Cyber Insurance (03:59)
think 442%. So we are in the crosshairs as real estate people for these cyber criminals.

They know that we are making large transactions, whether it’s cash buyers making, you know, six figure, seven figure transfers, or if it’s ⁓ people putting their nest egg down to get their first home or their, ⁓ their home.

and it goes to the wrong person. So I’m sure you guys have heard a lot of unfortunate stories like that, but that’s kind of the world we’re living in. And instead of putting our heads in the sand, we gotta protect ourselves and our customers from these fraudsters.

Michelle Tack (04:44)
Yeah, and what I found interesting when we were preparing for this call today, this podcast is how focused you are on that specific use case of, know, the. You know that I mean, I didn’t know those numbers, those are huge numbers, right? And when you talk about these assets and people that are transacting in that manner, we’re talking about lifetime decisions, whether it’s a commercial.

real estate transaction, you know, in the millions or, you know, larger, 10 million, a hundred million, that can have a huge impact to a number of people that are involved in that transaction and affects lives. So I was very interested to hear you say that. ⁓ You clearly know the statistics and I gotta imagine that’s part of, you know, obviously, know, job one, but can you tell me about how you’re going about ⁓ being, you know, having your

⁓ insurance company really focus on that and run it smoothly in terms of the operational side of the business, things that you’re employing to ensure that ⁓ you continue to focus on that area and ⁓ items that help you be efficient in your day-to-day process.

Joe Erle – C3 Cyber Insurance (06:06)
Absolutely. So part of our process is quantifying the risk. We put people through a report that does over 50,000 Monte Carlo simulations of loss. It looks like ransomware, data breach, network outage. And in addition to that, we have the conversation about the wire transfers because of course real estate ⁓ is more vulnerable to that than anybody. And a lot of times,

people think they have five million or a million in cyber insurance, but they have a much smaller sub limit for fraudulent transfer ⁓ or misdirected payment. ⁓ One would be somebody gets into your system and makes the fraudulent transfer themselves. And the other one is they convince you to actually make the payment to them. And that’s actually more common. And

Michelle Tack (06:39)
Mm-hmm.

Joe Erle – C3 Cyber Insurance (06:57)
knowing the difference and making sure that you have those coverages is really important. Another thing to keep in mind is that people may have very low supplements and they don’t know that they could buy more coverage or the agent never had that conversation with them is what’s your average wire transfer? What’s the highest wire transfer you have? And most policies start with 250,000 maybe or 100,000 in wire transfer fraud.

sublimit, which isn’t that much, but you can up it to 500,000 million, 2 million, really as high as you want to build that tower with the right companies backing you up.

Michelle Tack (07:35)
So what would you recommend? know it would be based on the transaction size, but what is your minimal that you would say, look, you’ve got to have X percentage of insurance on this transaction. Are you suggesting that it should be the maximum or can you talk a little bit about that a little in terms of, your A, B and C’s not in great detail, but just one or two things that you’re like, this has to happen to keep you safe.

Joe Erle – C3 Cyber Insurance (07:59)
Absolutely. I think the biggest thing that you do is do an out of bound check on any wire transfer or wire transfer change. So if somebody sends you an email saying that, you know, we need to change the bank account to this, that you go into your Rolodex, not the number on the email, because they have their own call centers, they can pick up ⁓ and tell you that everything is fine. Just change the numbers.

call the actual person and ask them if they really want to change that. And by doing that, you’re ahead of like 95, 99 % of people that are not doing these checks because that’s where things fall apart when people don’t follow their procedures. We have a white paper that people can contact us and get all about fraudulent transfer and how to prevent it.

Michelle Tack (08:52)
That’s great.

Joe Erle – C3 Cyber Insurance (08:53)
And

a lot of it comes down to your controls. What do you do when people ask you to change their information? And this could be external, could also be internal. You could have employees that are asking you to change their direct deposit. they start telling you, well, I never got my money. And you’re like, well, you told us to change it to this bank account. No, I didn’t. It’s like the same story, but internal. that could cause. ⁓

poison in your culture inside your environment as well.

Michelle Tack (09:57)
Sure,

absolutely. Can you? Go ahead, I’m sorry.

Joe Erle – C3 Cyber Insurance (10:00)
Yeah, we even had ⁓ at our

agency here, one of the employees bought gift cards for a holiday party because the CEO told her to ⁓ via text. She just went and bought the gift cards and gave the information to the hacker. It’s like, why would I ask for gift cards?

Michelle Tack (10:08)
no.

Right, exactly.

No, but I mean, you know, we think we’re really smart and that would never befall us. But when you’re under pressure or stress, and it may not be from work, it just be, you at home, you’re just limited on time. We don’t always think through these things in a rational manner and everybody’s susceptible to that, right? I mean, that’s factual. In terms of, you know, every operator I talk to, ⁓

And that I know there’s always a point in time where as I grow and expand and add and we’ll talk about your you know, your desires and in terms of growth in a minute, but you know, can you talk to a time when you a Deal was going south right or maybe there was something in the office that was going south or maybe it’s something that affected your business and you were able to pivot quickly

and still rectify the situation. And if not, maybe what you learned about it. Can you talk to something like that? I’m sure, you know, we’re not all perfect.

Joe Erle – C3 Cyber Insurance (11:25)
Yeah, absolutely. mean, a lot of deals come up where you don’t have all the information and a lot of times people just look at the bottom line of like how much is the insurance, know, how much is it ⁓ question. And cyber insurance is non-standard. There’s no like standard cyber insurance policy. So we try to sell a consultant.

Michelle Tack (11:33)
Yes.

Mm-hmm. Right.

Joe Erle – C3 Cyber Insurance (11:52)
in a consultative approach where we do a lot of like comparisons and show people what they want, what they need, what works best for their business. You know, if you’re an AI company or you’re using AI, you want AI coverage, right? Or, you know, if you’re like, for example, this one company we were talking to, this is a good example.

Michelle Tack (12:09)
Mm-hmm. Mm-hmm.

Joe Erle – C3 Cyber Insurance (12:17)
They had $5 million of insurance. Their quote was, you know, 20 % lower than ours. And we looked inside their actual policy and they had a ransomware sub limit for $100,000. And guess what their deductible was? $100,000. So they’re buying a policy over here where, you know, it doesn’t have any coverage for ransomware, but at the same time, they think they have $5 million.

Michelle Tack (12:34)
$100,000.

Joe Erle – C3 Cyber Insurance (12:45)
So it’s just getting all the information, making sure that you’re talking to the right people. I think that’s another problem that I run into a lot is that I’m talking to like the chief information security officer or the head of IT and they’re not really the decision-maker. The decision-maker is the CFO. ⁓ How do I bring those people into the conversation either early where…

you know, that’s my first point of contact and then they send me to the IT department or later where I at least get a chance to propose to them. And I’m not just like a number on a piece of paper.

Michelle Tack (13:22)
So it sounds like maybe you’ve had experience where there was a misunderstanding from the prospect or the client that they were covered for X, but it was only Y. Is that a fair statement? And then you had to maybe re-educate them or what have you? Did that ever happen? Yeah. Anything.

Joe Erle – C3 Cyber Insurance (13:37)
Yeah, absolutely. I mean, it’s probably a lot like lending

people where they’re looking at the small print. They’re well, their rate is better than ours, but look at these fees that they’re adding on top of it. You’re much better off with this rate because X, Y, and Z. And you’re like, oh, OK, so this rate that they, it’s kind of a bait and switch.

Michelle Tack (13:45)
Yes, right.

Joe Erle – C3 Cyber Insurance (14:02)
And there’s that in insurance too.

Michelle Tack (14:47)
⁓ A couple more questions for you. We talked earlier about the opportunities and opportunities for growth and you you are clearly doing well, but you also have you know some things like that you’d like to achieve in next year or so. Can you talk to that a little bit Joe?

Joe Erle – C3 Cyber Insurance (15:04)
Absolutely. I have a number of goals here, but I’d like to compete more with the Alphabet companies. We’re the largest independent brokerage here in San Diego, but I’d like to compete more with the Marsh’s, Aon’s, Woodruff’s, Lockton’s out there, the name brand brokerages. And I think that

the middle market is underserved. Companies between 50 million and a billion in revenue, I think that for a lot of these companies, they’re small accounts still and they’re getting underserved. And I’d like to write three to five brand name accounts in the coming years. Household names.

Michelle Tack (15:33)
Mm-hmm. Mm-hmm.

Right, right, yep.

That’s great. That’s wonderful.

Yeah, absolutely. mean, you’ve got a good product and I love the fact that you know where you’re going, that you’ve defined that in terms of revenue, which is great. ⁓ Last question I have for you is we talked about your network, that you have a variety types of people and different areas of expertise in your network to assist you. And I imagine

With those goals, you’ll also extend that out in terms of your network. But can you talk to what your network looks like today and how you’re using them? And I want to say use is not the right word, facilitating those relationships.

Joe Erle – C3 Cyber Insurance (16:35)
Absolutely, I think for a network to really work well, it has to go both ways. And I’m always looking for opportunities to upgrade my customers’ cybersecurity. I’m always asking them questions on what they need, whether they’re trying to expand, they need a new location, and I can refer them to a commercial real estate broker. And just make it a win-win for everyone.

Michelle Tack (17:03)
That’s great. You’ve been a wonderful guest. Thank you for joining us. Your role of C3 Cyber Insurance. Before we go, could you provide your contact information? Because I’ve got to believe there’s some people on this podcast that are listening going, ⁓ I need to investigate this. So whether they want to partner with you or do business with you or just curious. So do you mind providing your contact information?

Joe Erle – C3 Cyber Insurance (17:31)
Absolutely. There’s a lot of great ways to get a hold of me. I’m on LinkedIn under Joe Erle, J-O-E-E-R-L-E. I’m on Instagram, TikTok, and ⁓ under It’s Cyber Joe, I share a lot of ⁓ 30 second, 45 second snippets on cyber insurance and cybersecurity. I think some people feel are helpful.

I don’t know how many people actually listen to it. We’ll see. ⁓ I also have a podcast called Ransomware Rewind where we do long form interviews with ⁓ chief information security officers, IT people, new startups and AI and privacy. So it’s not just about ransomware, it’s all about cybersecurity and keeping everyone safe. I think there’s a lot to learn there. And of course, if you

Michelle Tack (17:57)
I’m sure they do. I’m sure they do.

Joe Erle – C3 Cyber Insurance (18:26)
or looking for a cyber insurance quote, can email me [email protected], J-O-E at C, the number three, insurance.com, or you can go to our website, www.c3insurance.com.

Michelle Tack (18:41)
Great Joe, I appreciate it. You’ve been a great guest. For those of you that subscribe, we appreciate your business. And if you find continued value for those, please continue to subscribe. And those that haven’t, if you found value as well, please sign up. Joe, continued success in your business. Obviously, it’s incredibly important to all of us. And I think that ⁓ certainly you’ve got a field of opportunity in front of you. So thank you very much.