A real estate agency and two staff have faced disciplinary action after they mismanaged an attempted scam by foreign criminals.
Consumer Protection WA said that Peel Realty, trading as Raine & Horne Mandurah, almost sold an overseas client’s home without that client knowing after being fooled by a scam.
The regional agency, licensee Peter Ronald Vetten and property manager Galinda Hodge “were reprimanded for failing to exercise due skill, care and diligence”, the regulator said.
In January 2014, the fraudsters were successful in getting the email and phone contact details of the South African-based owner changed in the agency’s database, with the agency making “no attempt to verify the update” using the owner’s original contact details.
The fraudsters, purporting to be the owner, then requested the property be sold, with an offer accepted, according to Consumer Protection.
The attempted fraud was uncovered two days later when the real owner received a copy of the listing agreement that was sent to her home address in South Africa.
Consumer Protection said the agency immediately reported the matter to the police, with both parties than working together to conduct a mock settlement. Three people allegedly involved in the fraud attempt were later arrested by South African police.
Mr Vetten told The Sunday Times in a statement that the South African client had previously sold a property through Raine & Horne Mandurah and that she regularly changes her email address as she works in missions in different countries.
Mr Vetten also said that the police were fantastic to work with during the sting operation.
“From the outset, they warned us that secrecy was paramount to apprehending the fraudsters, so apart from the vendor we were unable to talk to other parties,” he said.
“As soon as we received an email from the scammers, we consulted with the fraud squad and they advised us how to answer it. We would send them a draft and they would approve and then we would send the email to fraudsters.”
Acting commissioner for consumer protection David Hillyard said such scams need to be detected at first contact, which is possible if agents followed fraud prevention guidelines.
“We commend the agency for their quick action once the scam was discovered, as well as their cooperation with the police investigation, but the disciplinary action was taken in order to emphasise the importance of real estate and settlement agencies detecting these scam attempts at the very beginning and not later in the process,” he said.
Mr Hillyard said agents need to verify the identity of clients before they change their contact details, particularly if they are based overseas or interstate.
Mr Hillyard also said this would not be the last scam attempted by foreign criminals given the potentially lucrative returns.
“Verification of identity procedures are critical requirements for key staff working in real estate and settlement agencies, so there should be no excuse for these fraud attempts not to be detected immediately upon initial contact being made,” he said.