Law firm warns of soaring settlement scams

Slater and Gordon Lawyers has warned home buyers of an uptick in crime targeting the latter.

According to the law firm, it is seeing a rise in reports about criminals hacking conveyancers’ email accounts to trick home buyers into transferring settlement funds to unknown accounts.

Julijana Todorovic, a lawyer from Slater and Gordon Lawyers, said that the law firm has received an increased volume of reports from buyers who have fallen victim to the payment diversion scam (which is also known as conveyancing fraud).

Todorovic said that the scam usually follows a data breach that enables a hacker to intercept emails between the conveyancer and the buyer and request that the buyer transfer funds to 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,” Todorovic said.

“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 that while some bank customers can get their bank to block scam transfers if detected early, it has sometimes been too late for some victims.

She urged buyers who are using conveyancing services to take preventative measure, as seeking compensation after being scammed can be a prolonged process that requires proof that the conveyancer had ineffective cyber security measures in place to protect the client.

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

The lawyer said that buyers should double-check the email addresses of correspondence that requests a transfer of funds and speak with their conveyancer to confirm that the request is not a cyber attack.

Todorovic said: “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.”

Indeed, cyber security threats have remained one of the biggest threats across the industry, with a KPMG report earlier this year saying that dealing with and protecting against cyber risks would be the top challenge in 2024 for 43 per cent of business leaders.

Todorovic’s warning comes as non-bank lender Firstmac was targeted by hackers last week as an unauthorised third party accessed its IT system and claimed to have stolen more than 500 gigabytes of data.

[Related: Non-bank lender hacked]