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Property buyers increasingly falling victim to conveyancer scam

Scammers are hacking into email accounts and tricking Australian property buyers into transferring them hundreds of thousands in settlement money, compensation lawyers have warned.

user iconLauren Croft 10 May 2024 Big Law
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Slater & Gordon Lawyers has been receiving an increasing number of inquiries from property buyers who had fallen victim to the payment diversion scam, also known as conveyancing fraud, according to lawyer Julijana Todorovic.

The scam usually follows a data breach, after which the scammer has been able to intercept emails between the parties and request that funds be deposited into a different account.

“This type of scamming is unfortunately happening right now across Australia and those unlucky enough to fall victim are losing significant amounts of money. We’ve been approached by an increasing number of people who have unwittingly transferred large sums of money – many hundreds of thousands – in accordance with detailed instructions they’ve received via email purporting to be from their conveyancer,” Todorovic said.

 
 

“But to their horror, they’ve learned that the email was from someone pretending to be their conveyancer. They’ve then discovered that the funds had not been transferred to the conveyancer’s trust account at all, but rather gone straight to a malicious actor.

“While some bank customers are able to get their bank to block transfers if the fraud was discovered promptly, in other cases it was too late.”

Getting compensation after being scammed is a lengthy process, which Todorovic said requires proof of inadequate cyber security measures in place on the part of the conveyancer that enabled the scammer to intercept the emails in the first place.

“It can take months to obtain the evidence required, not to mention it being an incredibly stressful time for the property buyers involved,” she said.

“Double-check the email address of any payment instructions you receive from your conveyancer, and if the address differs from previous correspondence you’ve had from them, you may be being scammed.”

Slater & Gordon urged those buying a property and engaging the services of a conveyancing professional to take precautions so they do not fall victim to fraud, as well as encouraged conveyancers to strengthen their cyber security measures.

“Taking steps such as speaking to your conveyancer to check that the request for payment is legitimate and the bank details are correct is also advised before transferring any funds to the nominated account,” Todorovic said.