No escaping accountability despite ‘deposit flicking’
But conveyancing body wants to meet with Fair Trading to stop process of house deposits going to a third party.
AUSTRAC, the premium body charged with enforcing anti-money laundering regulations, has said real estate agents are still accountable despite the controversial practice of “deposit flicking”.
But the peak body for NSW conveyancers has backed an industry petition calling for action to clamp down on “deposit flicking” by real estate agents.
The emerging practice, in which an agent transfers a purchaser’s property deposit to a third party to hold on the agent’s behalf until settlement, may constitute a breach of professional obligations, the Australian Institute of Conveyancers NSW argues.
But Katie Miller, AUSTRAC deputy chief executive – regulation, was definitive in her view.
“A real estate agent can’t contract out of responsibility for their AML/CTF obligations,” Miller said.
“If they provide a designated real estate service, those obligations apply regardless of who holds the deposit.”
AIC NSW said some real estate agents appear to believe that by avoiding holding funds in their trust account, they can bypass tough new AML/CTF rules.
An online petition is calling for action to curb the practice.
The petition, aimed at Riverstone Partners product Agency Settlements, had gained more than 170 signatures as of Thursday.
AIC NSW president Jennie Tonner said she supported the petition.
“I am hoping it gets enough votes so that we can approach Fair Trading again to urgently meet with us to discuss and solve this issue,” Tonner told AC.
“We are very concerned that one party could hold up to billions of dollars of deposits and if they went bankrupt or receivers were appointed or they were scammed and lost all of the funds, what protection does the consumer under a Contract have to get their deposit back.
“At best, they would be behind larger creditors, which is simply unacceptable.”
In an alert to members this week, the peak body urged conveyancers to take “pre-emptive action” against the practice in order to protect clients.
This included making sure to verify agent intentions on purchaser deposits as early as possible and not “to assume the agent will hold the deposit”.
“Contact the selling agent immediately you receive instructions to confirm they will hold the deposit in their trust account (only) for the duration of the matter, the alert said.
The issue of “deposit flicking” has flared after real estate agents and conveyancers in July came under tough new AML/CTF rules aimed to cracking down on organised crime.
Under the “Tranche 2” laws, overseen by AUSTRAC, practitioners must conduct due diligence on clients, report large cash transactions, keep records, and report suspicious activity.
Companies and individuals in breach of the laws face potential multi-million-dollar fines.
Agency Settlements has defended its business model.
Riverstone Partners CEO Lucas McEntee said he stood by the Agency Settlements platform.
“The AIC bulletin dated July 10 2026 does not reflect our business or our business model. In fact, we agree with the points raised about deposit flicking,” McEntee said.
“Regarding Riverstone Partners incorporated law firm, Agency Settlements has, like every law firm in Australia, insolvency protections for funds held in trust for our clients.
“We 100% stand by our legal advice and business processes, as well as the multiple prominent Australian property law firms who have provided that advice and reviewed our processes since this service was launched in August 2025.”
Claims in the petition were “in our view, malicious, misleading and deceptive”, he said.
Agency Settlements’ solution claims to reduce settlement administration by 90 per cent and ensure a “clean, on-time settlement”, according to its website.
Launched in August 2025, the company is said to have signed up agencies around Sydney for its settlements portal, onboarding several agencies per week.
NSW Fair Trading has been approached for comment.
