Real estate agents are not doing enough to prevent identity fraud, a new survey has found.
Although 40 per cent of Australian real estate agents are concerned about fraudulent activity, only 2.17 per cent use a verification app to confirm that they are dealing with the true owner despite tough VOI (verification of identity), a new InfoTrack survey has found.
Failure to adhere to the VOI regulations can lead to heavy fines, licence cancellation and industry disqualification.
The survey has also found that more than half of agents (53.62 per cent) have internal check processes which are followed by all staff and 39.13 per cent use state fair trading guidelines, complying with the Property, Stock and Business Agents Act 2002.
InfoTrack chief executive John Ahern said that agencies would be well advised to question whether these internal processes are sufficiently robust, especially with property fraud on the rise in Australia and subsequent litigation going against the agent in many cases.
Mr Ahern said that property fraud, or “hi-jacking”, can now involve many different methods at different stages of the sales process, from fake sellers to bogus investment schemes and computer hackers stealing the sales proceeds mid-transfer.
“Agents are being warned to be vigilant not only with statutory checks but also with their IT security,” the CEO said.
“The size of funds transferred in a single transaction makes property scams very attractive to fraudsters. In most cases, the money is unrecoverable, and we have seen successful litigation against the real estate agent who sold the property in a number of cases here and in the UK where this type of fraudulent activity has tripled in recent years.”
Mr Ahern also said that more than 40 per cent of real estate agents put final settlements, and commissions, at risk due to lost or incomplete documents.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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