Property Settlement Scams and Fraud Prevention

A property settlement usually involves the single largest electronic payment most people will ever make, and that has made conveyancing transactions an attractive target for organised criminals. Rather than breaking into a bank, scammers intercept or imitate the everyday email correspondence between buyers, sellers, agents and conveyancers, then quietly insert their own bank details into the conversation. By the time anyone notices, the money has often already left the country. Understanding how these scams work, and building a few simple verification habits into your transaction, is one of the most effective things you can do to protect a purchase, sale or refinance.

How Payment Redirection Scams Work

The most common scam affecting property settlements is known as payment redirection or business email compromise. A criminal gains access to an email account belonging to a conveyancer, agent or one of the parties, either by hacking it directly or by registering a lookalike domain that differs from the real one by a single letter. They then monitor the conversation until a payment is due, at which point they send an email, often timed to look like a routine update, advising that bank account details have changed. The unsuspecting party transfers the money as instructed, and because bank transfers move quickly and are often sent offshore, recovery is frequently difficult or impossible. Scamwatch, the national reporting service run by the Australian Competition and Consumer Commission, publishes detailed guidance on how these business email compromise scams operate and why they are so effective against busy conveyancing transactions.

Why Property Settlements Are Such an Attractive Target

Several features of a typical settlement make it appealing to scammers. The amounts involved are large and paid as a single lump sum rather than in smaller instalments. Multiple parties, including a buyer, seller, agent, lender and conveyancer, are usually exchanging emails about the same transaction, which gives criminals plenty of opportunities to intercept a message. Settlement dates create genuine time pressure, so people are more likely to act quickly on an email that claims to be urgent. This combination applies whether you are completing a residential purchase, a residential sale, or a larger commercial purchase, and it is one reason every party in a transaction needs to stay alert from exchange through to the day funds actually move.

Common Scam Scenarios in a Conveyancing Transaction

Deposit redirection is the scenario most buyers encounter, where an email claiming to be from the agent or conveyancer asks for the deposit to be paid into a "new" trust account. A second pattern targets sellers, where a fraudulent email requests that settlement proceeds be redirected to a different account shortly before completion. A third and less common scenario involves a criminal impersonating a genuine seller or buyer altogether, corresponding entirely by email and never meeting anyone involved, which can be harder to detect until settlement is imminent. Refinancing transactions are not immune either, since a refinancing settlement still involves a substantial payout that criminals can attempt to intercept in exactly the same way.

Warning Signs That Something Is Wrong

Genuine changes to bank account details in the middle of a transaction are rare, so treat any such request with suspicion. Watch for language that pushes urgency, requests to keep a change confidential from other parties, email addresses that look almost correct but contain a subtly altered domain, and any request to avoid phoning to confirm details. Attachments or links that ask you to log in and re-enter banking information are another common red flag, since a legitimate conveyancer will never ask you to do this by email.

Practical Steps to Protect Your Settlement Funds

Before transferring any significant sum, phone your conveyancer using a number you have sourced independently, such as from their website or a previous invoice, rather than a number included in the email itself. Ask whether your settlement is being processed through an electronic platform such as PEXA electronic settlement, since verified financial institution details are locked into the digital workspace and cannot simply be altered by an uninvited party partway through the transaction. Agree at the very start of your engagement on the bank details your conveyancer will use, and treat any later change to those details as something to verify by phone before acting on it, no matter how convincing the email looks.

What to Do If You Suspect a Scam or Have Already Paid

If you receive a suspicious request, do not reply to the email or click any links inside it. Contact your conveyancer and your bank by phone immediately using independently sourced numbers. If a transfer has already been made, call your bank straight away and ask them to attempt a recall, since the first hours after a transfer are the best chance of stopping the funds before they are moved again. You should also report the incident to Scamwatch and, where identity documents may have been exposed, to the relevant state consumer protection agency, such as those covering Western Australia, which regularly warns settlement agents and the public about bogus buyer and seller schemes in property transactions.

How a Conveyancer Helps Reduce This Risk

An experienced conveyancer builds verification into their everyday process rather than treating it as an afterthought. That includes confirming bank details by phone before any funds move, using secure channels for sensitive documents, and training staff to recognise the warning signs of a compromised email chain. Choosing a firm that takes these steps seriously, and asking directly about how they verify bank details before settlement, is a simple question that can make a real difference to how well protected your transaction is from start to finish.