Fraud risk leads to call to delay new online property transfer system

A petition has been signed by 600 conveyancers to delay the rollout of Australia’s new online property transfer platform, Property Exchange Australia’s PEXA e-transfer system, following breaches where fraudsters stole $1.25 million from two owners while their homes were being settled.

The electronic platform, owned by state governments and Australia’s big banks which is being used to settle and exchange titles for thousands of properties across the country, is facing a significant backlash from legal practitioners.

Homes at risk as thousands of dollars missing after system hack

Most of the money has since been recovered but one of the vendors, MasterChef finalist Dani Venn and her husband Chris Burgess, stand to lose their home after hackers entered the PEXA system through their conveyancer’s account and diverted $250,000. The fraudsters hacked into Ms Venn’s conveyancer, Sargeants Knox Conveyancing, accessed emails from PEXA and added themselves in the PEXA system as another user.

The Commonwealth Bank was able to freeze and return $138,000 of the funds.

E-Transfers to replace paper exchange

The e-transfer system will replace Australia’s 150 year old Torrens title paper exchange of property with electronic certificates and is set to become mandatory in Victoria in October 2018, with NSW to follow suit next July with other states to follow later. Queensland practitioners and the Queensland Titles Office are adopting a cautious approach to the platform to ensure proper security is guaranteed.

Security vulnerabilities raise concerns

While practitioners has been assured repeatedly by PEXA that the platform is safe and secure, these fraud incidents were only possible because of significant security vulnerabilities which raise concerns over the timetable to make the system mandatory.

 

 

Disclaimer

This article was written by Margaret Miller, partner at Bell Legal Group. It is general in nature, is not legal advice and must not be relied on as such. If you need assistance relating to the topics discussed, please contact Margaret to obtain advice specific to your circumstances. Call 07 5597 3366 or send an email to mmiller@belllegal.com.au