Hackers and cyber criminals are using emails sent from conveyancers email inboxes to trick Melbourne families into giving up six figure sums during home transactions.
A Melbourne couple’s home-buying dream turned into a nightmare after devious scammers hacked into their conveyancer’s web server to trick them into a more than $500,000 transfer.
The tech-savvy buyers, one of whom works in finance and IT, were convinced by an email sent from their conveyancer’s account — but with altered bank payment details.
The heartbreaking discovery was only made some time later.
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“I gave the conveyancer a call and she said she hadn’t requested payment at all,” the homebuyer said.
“My stomach immediately dropped. I explained that the request had come from her email account, but she said she hadn’t sent it. She checked her emails and found nothing, so within a couple of hours I was at the police station reporting that we had been scammed.
“There was immediate panic, stress and tears and I said to my husband, ‘I’ve ruined our lives. That’s all of our money gone’. There were a lot of tears.”
Both the couple’s bank and the bank used by the scammer denied liability, though police later determined the recipient bank account had been set up fraudulently and the money turned into crypto currency quickly after it was transferred.
Scammers are using messenger services and emails as a weak point to catch savvy homebuyers unawares during purchasing processes.
The police investigation also found it was the broker who had been compromised by hackers, not the couple’s digital accounts, with the email requesting funds linked to an international IP (internet protocol) address.
The family are still waiting to see if indemnity insurance from their conveyancer will cover the loss, but it is not expected any of the transferred funds will be recovered.
They have urged Australia’s banks to set up an alert system for suspicious transactions.
Slater and Gordon associate Julijiana Todorovic said the firm had seen a “concerning increase” in the numbers of people reporting hundreds of thousands of dollars lost to “quite sophisticated” payment diversion scams.
“This is a very difficult area of law as the cyberfraud landscape is evolving faster than the law has been able to keep up,” Ms Todorovic said.
While Australia-based mules were often used to establish a bank account, most of the cyber criminals were overseas and the lawyer said even if charges were brought it didn’t mean the money would be returned.
Ms Todorovic said they were working with a growing number of victims to seek compensation from conveyancers that had not used adequate cyber security measures, but gathering evidence could take months.
The rise of AI has helped scammers to become more believable.
Australian Institute of Conveyancers Victorian operations manager Mark Powers said the industry had implemented a range of measures to minimise risks, including requiring all members to have customers check bank details over the phone before making a transfer.
However not all conveyancers are members of the industry group.
The AIC is also working to open discussions with the Australian Banking Association to discuss greater scrutiny around high-value transactions.
While unable to estimate a cost increase, he said he believed the industry was facing higher premiums for insurance policies as a result of scammers.
With some victims losing as much as $1m, Mr Powers said it was vital anyone who thought they had been scammed in a property transaction to alert their conveyancer and authorities as soon as possible.
The head of cyber security at Australia’s largest digital conveyancy firm has also noted an “uptick” in scam attempts after they initially dropped back following the Covid era.
PEXA chief information technology security officer David Willett said the rise of AI had been “beneficial to the bad guys”, making it harder to spot scams.
With the vast sums of money on the line in a home transaction, he said buyers should be particularly wary when they received correspondence with a “sense of urgency”, that seemed out of character or asked for usernames, passwords, bank or credit card information.
Huge sums of money as high as $1m have been stolen by scammers.
He also advised taking steps to ensure all your devices and computers have up to date security settings and passwords, and to double check bank details even when they came from legitimate addresses.
Instead of using emails and texts to communicate, he said some operators like PEXA could provide a secure messaging service that would add another layer of protection.
While ACCC Scamwatch figures show $91.6m was stolen from Australians in 2023 in redirection scams, Mr Willett said it was believed the true stats would be much higher as many scam victims did not report the crime.
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