REINSW joins confidential national push to curb property payment redirection scams

The Real Estate Institute of New South Wales is taking part in a confidential national consultation aimed at reducing payment redirection scams in property transactions, and has used it to remind agencies that deposits, holding fees, rent and strata levies are the points where they are most exposed.

The institute made its contribution through consultation with NSW Fair Trading. At the government's request, REINSW cannot publicly disclose its submission, the vulnerabilities it identified or the safeguards it proposed, and it has not said when the consultation will conclude or whether the outcome will lead to changes in regulation or practice standards.

REINSW described the scams as criminals intercepting or imitating property-related communications and issuing false payment instructions, commonly posing as agents, conveyancers, solicitors, settlement agents or developers. The method is known as business email compromise.

The institute said the risk is highest wherever account details are shared, money is transferred or trust funds are released. In sales, that means deposits, expressions of interest and the release of deposit balances. In property management, it means holding fees and rent payments, and in strata management, levies and other owner contributions.

Until the consultation's outcome is public, REINSW has given members two steps. The first is to confirm account details independently before any transfer is made, rather than relying solely on payment instructions received by email. The second is to check whether the agency's cyber or crime insurance expressly covers business email compromise, social engineering fraud and payment redirection losses, including losses involving client or trust funds.

The insurance point is the one principals are most likely to have overlooked. A policy that does not expressly extend to trust money or social engineering may leave an agency carrying a loss its clients expect it to make good, at the very points in a transaction the institute has identified as most exposed.