Cybercrime in Conveyancing Transactions

In South Australia recently several cybercrime incidents have occurred, causing an approximate loss of $1.3 million to clients.

Cybercrime has become an increasingly prevalent issue in conveyancing transactions. More and more stories are appearing of an unassuming Purchaser who has inadvertently transferred money intended for their conveyancer’s trust account to a third party who has masqueraded as their conveyancer.

The common story is that a conveyancer has sent an email to their client containing the details of their trust account. The email is intercepted by cyber criminals who then alter the bank account details before allowing the email to reach its intended destination. When the time comes for the unassuming client to deposit their money in the trust account of their conveyancer, the money is sent to the cyber criminal instead. Regardless of whether your representative is a conveyancer or a solicitor this cybercrime issue is equally applicable.

The ways to combat this serious issue raise their own problems, as they have a tendency to greatly reduce efficiency. Some solutions include only providing bank details to clients in person, over the phone or sending out letters in the post. These methods eliminate the possibility of cyber criminals hijacking the correspondence but are not particularly efficient.

There are also situations where the legitimate email address of a solicitor or property agent has been hacked, and emails sent to clients from a seemingly legitimate source. The issue with these situations is that people who are often not well versed in the ins and outs of email and technology are unlikely to spot a scam email that comes from a seemingly legitimate source. 

In order to protect yourself it is very important to take precautions before money is transferred by electronic funds transfer. Before executing any funds transfer the bank details provided to you by your solicitor should be confirmed verbally. One method of reducing the risk is for your solicitor to provide you with details of their trust account when you attend in person for your verification of identity interview, although this will not be possible in all circumstances.

If at any time you are concerned with the validity of information provided in an email contact the sender directly to confirm the details.

 

Tim von Einem

31 October 2017