Is e-conveyacing safe?

How safe is it to transact via an e-conveyancing platform?

Online property settlements conducted via Australia’s e-conveyancing system PEXA will be compulsory in NSW by 1 July 2019. At NP Conveyancing, we have recognised how critical it is for every industry to keep pace with this transformation to the digital era. We have prided ourselves on transitioning to the electronic settlements from the early stages and have successfully completed 100’s of electronic transactions via the PEXA platform.

As with all computer systems, internet and electronic transaction security is at the forefront of everybody’s mind. Internally, our office continuously strives the upmost diligence to ensure we have systems in place to protect both our firms and our client’s information to maintain privacy and reduce the risk of cyber crime. These are detailed to our clients during the first stages of the transaction so you are clear on what we will and will not ask you to do. We encourage our clients to contact our office with any questions or concerns during the course of their conveyance.

Following the recent two incidents in Victoria where fraud was committed involving the e-conveyancing process, improved security measures have been implemented by PEXA to their system to safeguard participants as set out in the press release below.

The Office of the Registrar General (a regulator, and policy and legal adviser working to ensure the integrity of the NSW land title system) has provided the following information:

I wanted to provide you with an update on the two incidents of fraudulent activity that affected PEXA subscribers in Victoria. These two incidents are stressful for everyone involved. We are pleased that one of the affected parties is now able to go ahead and settle on their new home.

Earlier this week I asked the PEXA security team to brief me, interim Director, Department of Finance, Services and Innovation, and the NSW Government Chief Information Security Officer on this incident. This included outlining the steps they have taken and will take to avoid this happening again. I want to reassure you of several important things.

? These were isolated incidents. It involved an unknown person gaining unauthorised access to a practitioner’s email accounts.

? There have been no other incidents elsewhere.

? We are satisfied that the steps PEXA is taking now will help prevent such incidents from happening again. These steps include:

? increased monitoring of PEXA workspaces, including alert on changes in passwords, user identification and bank details

? stronger controls over creating new users

? introduction of time stamps to show date, time and specific user so practitioners can see who, when and what has been changed prior to settlement, and

? introducing multi-factor verification for subscribers logging into the system.

Independent review

Of course, with any security incidents we must always look at what we can learn to avoid a repeat offence and to add further safeguards where necessary.

To this end, we will be working with our colleagues in other jurisdictions to conduct an independent review of PEXA’s security to further identify any more steps it can take to strengthen its system.

This is in addition to PEXA’s existing requirements to complete annual security assessments, penetration testing, and to comply with industry security standards.

Isolated incident

eConveyancing is a safer more secure system than paper conveyancing.

I would like to reassure you since the introduction of eConveyancing in NSW in 2013, there have been no incidents of fraud resulting from electronic lodgment in NSW.

In comparison, NSW has paid out millions via our Torrens Assurance Fund for fraudulent paper dealings since 2013. Indeed, a significant part of my Office continues to be dedicated to managing the Torrens Assurance Fund (TAF) related litigation work covering this fraud in the paper.

Insurance

Since these two incidents, you have asked the Office of the Registrar General ORG, or our NSW industry peak bodies, about insurance requirements. With eConveyancing, a requirement under the Model Participation Rules is that all participants involved in a settlement must maintain appropriate insurances.

Further, should users of PEXA’s system suffer from fraud or error in PEXA’s system, PEXA has insurance cover to enable customers to recover their costs in particular instances. This will also be a requirement of future operators.

PEXA has also announced it will provide a consumer guarantee to protect vendors whose properties are settled through the PEXA platform. This guarantee will pay out any lost funds to the vendor in the circumstances that occurred in Victoria. PEXA will then seek to recover them from other liable parties.

I can confirm NSW will insist on this safeguard for all electronic network operators going forward. We intend for this to include requiring operators to provide details of such policies annually and to make them public.