Top tips to protect yourself from large financial loss during a property exchange
Today, hearing about fraud and identity theft is unfortunately not uncommon. This month, land valuer LandMark White was hit with a data leak, reporting that, “it’s reputation and financial future hang in the balance.”
Lawyers need to stop emailing trust account details and contracts to their clients. The risks of sharing bank account details via email are high. Australian businesses lost more than $7.2 million to email scammers last year according to an Australian Competition and Consumer Commission (ACCC) report. What is more concerning, is the cases of fraud and identity theft that are not reported due to fear of reputational damage.
“Scammers are hacking business email systems and impersonating the intended payment recipient,” ACCC deputy chair Mick Keogh said. “Depending on how long the scammers get away with this and how large the transfers are, this scam can be devastating to a business’s bottom line – to the extent of forcing small and medium businesses into closure.” While they may not be a small or medium business, this may be the reality for LandMark White.
Across Australia in the property space, in 2018 alone, Victorian property buyers collectively lost more than $200,000 to a hacking scam targeting the email accounts of real estate agents. A Brisbane man lost $90,000 of his deposit proceeds from the sale of his Gold Coast investment property and two property buyers in South Australia also lost close to $1 million through email scams. These incidents are not indiscriminate nor in isolation.
Hackers can send emails from a lookalike account under your name or intercept communications not intended for them. There are plenty of ways to protect your firm against cyber security threats including:
• Using the right anti-virus software.
• Educating your employees with phishing awareness training.
• Investing in two-factor authentication.
• Always verifying details with relevant parties like double or triple checking any change in details via different methods of communication. If there is a change of account details, call your client to confirm.
When undertaking a property exchange, key elements of the process that must be guarded against cyber security risk include the Verification of Identity of key persons, the electronic Contract for Sale and the exchange of trust account details for property deposit.
In March 2019, legaltech pace-setter, InfoTrack launched Securexchange, which is designed to stop the need to share trust account details via unsecured emails and protects the reputation of all professional parties involved in the property transaction.
The key to the service is that only verified parties can view trust account and deposit information, streamlining communication between those parties and offering transparency over the progress of the exchange.
InfoTrack CEO, John Ahern says “We surveyed our legal clients and learned of an alarming number of cyberattacks, with 29.8% experiencing hacking attempts and 23.3% having their emails intercepted. Off this back of this knowledge, we developed Securexchange, to assist in bringing together verified parties in a tightly secured transaction to exchange details in real-time.”
Since it’s introduction, interest in Securexchange has been phenomenal. Over 250 verified parties now use the service.
InfoTrack made the commitment to support clients through the transition to e-conveyancing. Securexchange offers yet another compo¬nent of the conveyancing workflow to be secure, transparent and efficient. Further, InfoTrack guarantees that if a deposit is transferred to the verified trust account listed in Securexchange, the deposit funds are guaranteed. This gives clients peace of mind that if there are any security breaches on the part of InfoTrack, then InfoTrack makes sure the deposit funds are returned.
And the legal industry is curious! As a free service, the Securexchange website has had 16,000 unique website views with almost 50,000 watching the Securexchange explainer video below.
InfoTrack is continually adding new features to Securexchange. The most recent gives lawyers the ability to securely share an Electronic Contract of Sale (eCos) with real estate agents directly from the InfoTrack platform. Coupled with the ability for lawyers to share Trust Account details securely with other parties, Securexchange provides legal and conveyancing professionals with a real answer to combat cyber-fraud at no expense to their firm.
So dedicated to educating lawyers on cyber security and the risks and rewards of shifting conveyancing into the digital future, Infotrack recently hosted three seminars across Sydney, Melbourne and Brisbane. The seminars offer three CPD points to those who watch the recordings online. A demonstration of Securexchange was a drawcard for many attendees and can be seen here.
Email fraud has become a major problem in the Australian property. Hackers are continually finding new ways to intercept email communications and divert funds to different accounts, robbing innocent individuals. Your firm is only as strong as the weakest link in your information sharing. To protect your firm, invest in strong technology services and always be smart with what information you share. Know who you are communicating with and always choose the safest method to do so.