Bank account “mules” being used in scams against conveyancers

OVERSEAS-BASED criminals are using bank account mules to scam conveyancers and their clients during property transactions.

Unwitting or greedy accomplices are handing over their details so that fraudsters can set up complex stings and funnel funds out of the reach of Australian authorities.

It’s one of the ploys Slater and Gordon lawyer Julijana Todorovic has noticed dealing with the ongoing threat to property transactions where fraudsters hijack email chains, impersonating conveyancers as they set up the sting.

“The malicious actor, impersonating the conveyancer, will then email the purchaser with requiring payment for the property settlement and provide their own bank account details to transfer funds,” said Todorovic.

“The purchaser is often unaware of this until it’s too late.

“We’ve seen cases where head of the fraud operation is an overseas actor but uses an Australian-based ‘mule’ to set up an Australian bank account, which the purchaser transfers their funds to.

“After the receipt of the funds, the money is exchanged into crypto-currency and transferred overseas where it can no longer be traced or reclaimed.”

Getting ahead of the growing trend, Todorovic says switching the onus from making consumers responsible would be the best

“Under the current law, the onus to prevent a fraudulent transaction is largely on the consumer,” she said, adding that it can be unfair on those with low technological proficiency.

“Even sophisticated consumers are capable of being scammed, however, so better protections are important.”

Banks have taken some practical steps in the right direction, including the confirmation payee system and higher protections into their systems. But defrauded consumers still have inadequate avenues for compensation.

The UK has an alternative approach to liability that avoids the onus being on the consumer to prove losses against a scammer.

There the responsibility is on banks to prevent criminals establishing bank accounts and effecting transactions to the bank accounts.

The cost of compensating the consumer for their losses is split between the sending and receiving bank.

This incentivises banks to invest technology to prevent scams occurring.

“Australia should be looking to models such as this which avoid the inevitable access to justice issues of individual consumers being stung a second time when they seek to recover losses caused by cyber criminals,” said Todorovic.