Two recent cases of email impersonation fraud have shone the light on the potential security of data managed by PEXA (‘Property Exchange Australia’), Australia’s national electronic land conveyancing platform.
Why is this relevant to you?
Conveyancing is the process of transferring ownership of a property from one person to another. It is a critical step in the buying or selling of a property.
If you are in the process of buying or selling a house in New South Wales, Victoria, Queensland, South Australia and Western Australia it is more than likely that your conveyance will be conducted via PEXA.
Benefits of PEXA
PEXA has proven a valuable tool for home buyers and solicitors/conveyancers alike.
PEXA evolved from the Council of Australian Governments (COAG) meeting in 2008, which agreed to modernise the traditional paper-based property settlement process.
PEXA’s network of conveyancers and lawyers allow home buyers the ability to select the right conveyancing professional to help them through to settlement. PEXA allows the solicitor/conveyancer to:
- liaise with the home buyer or seller’s bank,
- conduct title searches,
- lodge transfer documents with Land Registries,
- transfer funds digitally to ensure a seamless settlement; and
- reduce the number of manual processes and the paperwork required with traditional conveyancing transactions.
- Payments are made digitally rather than via bank cheque. Automatic online document checks reduce errors, and documents are lodged instantly to make the process as quick and easy as possible.
Overall, using an electronic platform and solicitors have shown a strong willingness to work with PEXA because the system removes uncertainty and avoids errors. There are currently more than 3,500 members on the PEXA network, including Law To Your Door. More than $33 billion worth of property has been successfully transacted online via the platform to date. This will only increase as the property industry works towards a 100% online system of property exchange. The e-transfer system is set to become mandatory in Victoria in October this year, with NSW to follow suit next July.
How safe is PEXA?
2 instances of email fraud– the most recent on 31 May this year – raise questions about the resilience of the PEXA platform and the security of its data. Hackers broke into 2 conveyancing firms’ email accounts, accessed their mail from PEXA and set up new user accounts from which they were able to intercept the proceeds of sale, misdirect funds and leave one family homeless.
In response PEXA has introduced a range of cybersecurity measures and processes to counteract future fraud as well, on 27 June 2018, as announcing a new consumer guarantee for e-transactions. PEXA anticipates this guarantee will go above and beyond any guarantee available in the paper-based settlement process and will provide greater safeguards to consumers whose conveyancer or lawyer uses PEXA.
The Law Society has also written to the Minister for Finance, Services and Property, The Honourable Victor Dominello MP, to express the profession’s concerns, and will be meeting with him and other key stakeholders to consider any required action, including legislative protections, to ensure any outstanding concerns are addressed.
Given the mandatory adoption of PEXA in NSW in July 2019 and the relevance of this issue to a great many of our clients we will continue to update you on relevant developments.
Please be reassured that Law To Your Door is committed to maintaining the highest levels of cybersecurity on all IT systems used within the Firm.
The contents of this blog, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.