Peak body warns that property sector is a frequent target for fraud
Scammers have used Australia’s recent housing boom to pocket millions in ill-gotten gains, bilking both agents and home-sellers, according to the Real Estate Institute of New South Wales.
Real estate businesses are an attractive target for cyber criminals because one breach can allow hackers to access a “treasure trove” of personal and financial information, REINSW said. Phishing, ransomware and other cyber scams have become sophisticated enough that breaches are becoming harder to detect.
“Data shows that cyberattacks have ramped up since the onset of the COVID-19 pandemic, coinciding with the transition to remote work,” REINSW said. “And while proptech in the real estate space may be increasing productivity, proper systems are needed to reduce the risk of data security breaches.”
The way real estate agents conduct business make them an attractive target for cyber criminals, REINSW said. According to the Australian Competition and Consumer Commission, hackers are more easily able to intercept large, one-off payments – the kind common in real estate transactions – because the parties don’t have a previous business history.
“Consumers involved in these transactions may be unfamiliar with each other’s way of speaking, business processes and payment details, so may be less likely to spot oddities in communications,” an ACCC spokesman told REINSW.
Scammers stole more than $2 billion from Australians in 2021 – more than double the amount recorded in 2020. One type of fraud that has spiked in frequency is payment redirection, also known as business email compromise. In this scam, hackers breach a business or customer’s email account and send a payment request – usually for a payment that is legitimately owed – but direct those funds into a bank account controlled by the scammers.
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Losses from property-sector payment redirection scams in the first half of 2022 rose 124.4% from the same period the year before, from $1.2 million to $2.7 million, according to REINSW. However, the organisation warned that the problem may be even more serious than it seems.
“Only a fraction of scams are believed to ever be reported, so the real figure could be far higher than current statistics suggest,” REINSW said.
The organisation also warned that it’s not only major real estate players that are in the crosshairs. In fact, small and mid-sized businesses – which usually have lower cyber defences – are more often targeted.
Peter Matthews, REINSW president and founder and CEO of Realtair, urged agents to take steps to protect both their businesses and customers – and to remember that cyberattacks don’t always start on the business’s end.
“We could have all these great measures in place internally, but the scary part is a lot of this fraud isn’t happening within real estate businesses,” Matthews said. “Rather, it’s happening in the customers’ homes. Their email is being intercepted or their computer is being taken over, and some of these cyber criminals are acting as customers.”
REINSW said that one way agents can protect against scammers is to take transactions off channels like email and phone, switching instead to encrypted platforms. These platforms are not only more secure, but they offer convenience and transparency to customers, REINSW said.
“As agents, we’re in a position to take steps to protect consumers, and, in doing so, enhance our services and build trust in the real estate process,” Matthews said.
