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Reducing the risk of property fraud


While businesses struggle to make ends meet, pay salaries, and keep operations afloat amid the Covid-19 pandemic, many are facing increased activity from fraudsters intent on taking advantage of the situation. The conveyancing industry, historically a target for unscrupulous operators due to the large sums of money they hold in trust for transfer between buyer and seller, will not have been exempt from this increased interest from swindlers.

Ongoing paper-based processes in the property sector have always exposed it to risks and – with role players now leaning more strongly into digitisation due to Covid-19 lockdown restrictions – there is a heightened need to ensure processes are fool-proof.

The digitisation of the conveyancing industry has resulted in many wins for the sector and its clients. Those who were already working on electronic property transfer platforms during our lockdown have managed to continue to operate as normal and weather the Covid-19 storm far better than those who have been slower to embrace digitisation,” says Mellony Ramalho, Sales and Marketing Director at LexisNexis South Africa, a company that provides the property and legal sector with secure tools that expedite the property transfer process.

At LexisNexis, we had an exceptional 2020 for our Rates Clearance solution used by over 80 municipalities nationwide, with everybody embracing electronic transactions. The property transfer side of the business has also seen an uptick as lockdown restrictions continued to ease,” says Ramalho.

She adds, “Online solutions ensure that property transfers occur with less hassle and greater efficiency as clients receive real time updates during the process, enabling them to plan aspects such as administrative milestones, occupational rental, moving dates and budgeting accordingly.”

To successfully detect fraud, the entire property industry must deploy a combination of common sense and the right due diligence, looking into any irregularities when they arise. That means examining the details of those involved in the transaction through stricter identity checking and document verification, checking other properties or businesses owned, any adverse media – and of course, using the correct tools to facilitate all the checks and balances,” she says.

Ramalho offers the following tips:

  • Screen thoroughly: Do background checks on clients and transaction role players prior to processing transactions. This should include real estate agents, buyers, sellers – and the property due to be transferred. An online search via Google or LinkedIn will not suffice. Use a legitimate and reputable platform, such as Lexis Windeed and Lexis Convey and check information such as business directorships, property ownership, business registration details etc. In the case of agents, contact the principal at the agency to check that the agent is in fact an employee there.
  • Make that call: Always call to confirm banking details, and where possible, ask for more than one contact number to use as a backup check for complete certainty. Never trust an email, even on letterhead or from what appears to be an authentic business email address. Cyber criminals are able to intercept emails with surprising ease. Scams such as the compromise of business emails have become regular occurrences in many industries, with impostors intercepting operations and emails, changing banking details on what seem to be legit communications and diverting payments into fake accounts, before quickly moving the stolen funds. Entrust the role of checking banking and payment details to a trusted senior within the firm. 
  • Use digital and human firewalls: Conveyancers need to avoid reliance on either human or digital resources – but use them concurrently.  Update your cyber security but also use human resources to double check safety features. Conduct ad hoc vetting of staff, even those who have been employed long-term and thoroughly check out external suppliers before entrusting your internet and operational security to a third party.

As Covid-19 and lockdown restrictions appear to be a reality for the foreseeable future, all those in the property sector will need to work smart, relying on reputable digital platforms and trustworthy personnel to avoid fraud and ensure their post-pandemic survival.

Reduced face-to-face interaction means it’s more important than ever before to stringently suss out who and what you’re dealing with in a property transaction. While the current landscape has been tremendously challenging on a personal and business level for many, it presents an opportunity to enhance the digitisation of your property related business and improve all your processes for the benefit of both your staff and your clients,” says Ramalho.

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About LexisNexis® Legal & Professional

LexisNexis Legal & Professional is a leading global provider of legal, regulatory and business information and analytics that help customers increase productivity, improve decision-making and outcomes, and advance the rule of law around the world. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. LexisNexis Legal & Professional, which serves customers in more than 150 countries with 10,600 employees worldwide, is part of RELX, a global provider of information-based analytics and decision tools for professional and business customers.

In South Africa LexisNexis® has been assisting companies and professionals to remain abreast of changing legislation and shifts in the regulatory environment for over 80 years, combining the best of local knowledge in Butterworths with leading-edge tools and online solutions that have positioned the company as a pioneer of legal technology. LexisNexis South Africa’s business units include LexisNexis Legal Information and Compliance, LexisNexis Data Services, LexisNexis Business Software Solutions and LexisNexis Academic. South African investment firm, Tsiya Group acquired a minority interest in LexisNexis South Africa in July 2012.