Digital identity urged as cyber fraud rocks Australian real estate

Experts have highlighted rising concerns over cyber scams and payment fraud within the Australian real estate industry, with digital identity solutions being presented as a potential method to reduce risks and improve security.

Rising fraud and cybercrime

The real estate sector in Australia has seen an increase in sophisticated scam activity, including email interception, impersonation, and payment redirection fraud. Andrew Black, Managing Director at ConnectID, described the scale of the threat affecting both individuals and organisations.

"Absolutely. Real estate is becoming one of Australia's biggest targets for scams and fraud. We're seeing cybercriminals impersonate agents or conveyancers, intercept communications, and redirect large payments, sometimes hundreds of thousands of dollars, to fake accounts.

But the problem isn't limited to individuals. Criminal networks are using property to launder money and mask identities. In one major recent case, the Australian Federal Police dismantled a criminal group that laundered up to $190 million using real estate, crypto and front businesses. They've already restrained over $20 million in assets, including 17 properties."

Several incidents underline the risks facing the sector. The Australian Institute of Criminology confirmed money laundering through property remains linked to broader organised crime, while recent major data breaches have exposed sensitive client information at well-known real estate businesses. Payment redirection scams are on the rise, with Australians reporting losses of USD $10.7 million (AUD $16.2 million) in 2023, and broader estimates including business losses exceeding USD $59.5 million (AUD $90 million).

Sector vulnerabilities

Industry observers point to unstructured email communications and outdated identity verification as primary factors contributing to the real estate sector's vulnerability. Black warned that many parties in each property transaction continue to rely on insecure processes.

"Real estate deals involve many parties - sellers, agents, brokers, buyers, conveyancers - but their communication is often unstructured and insecure. Critical details like bank account numbers or settlement instructions are still being sent via email."

"Identity verification is also inconsistent. Some checks rely on scanned documents or forms filled out by hand. Others depend on someone spotting a fake ID. These outdated methods make it far too easy for fraud to slip through and create significant risks for both customers and businesses."

Small and medium-sized businesses make up much of the sector, further increasing challenges in investing adequately in digital security and modern compliance systems.

The promise of digital identity

According to Black, digital identity solutions help address several core security issues by enabling trusted, minimal information verification and reducing data duplication across businesses.

"Digital identity lets individuals verify their identity using an organisation they already trust, like their bank, to hold their data without having to share whole identity documents or overshare information. For example, with a few clicks you can confirm to a broker your address details without needing to share anything else. There's really no need to email scanned copies of your bills or driver license."

"With a service like ConnectID, businesses also reduce the amount of data they collect and hold, only requesting the information that is necessary for the specific verification. That means fewer opportunities for data breaches, and a big improvement in privacy and compliance.

Crucially, digital ID can enable authentication at any stage of the interaction. From account creation to document signing, or transaction, all participating individuals can be verified in real-time. That consistency and traceability are a major leap forward in mitigating fraud and improving digital safety."

Case studies from industry deployments, such as FLK It Over's document signing platform, illustrate practical benefits. Black noted that integrating digital identity checks improved both operational efficiency and overall security experience for agents and clients.

Data compliance and cybersecurity

The sector faces increasing obligations, with government regulation moving to bring real estate under the Anti-Money Laundering and Counter-Terrorism Financing regime from 2026. The Digital ID Act 2024 also sets out stronger requirements for privacy and security of identity verification. Digital identity tools are viewed as essential to meeting these evolving legal obligations and minimising breach risks.

"Strong identity is the foundation of any secure system. You're vulnerable when you don't know exactly who's on the other end of a transaction or communication. Scammers exploit that uncertainty.

Digital identity can help solve this by enabling real-time verification. It also helps organisations move away from email as a primary channel for identity verification, which is one of the biggest risks.

From a cybersecurity perspective, digital identity also supports data minimisation. Instead of collecting and storing excessive amounts of personal information that come with uploading whole documents, you can simply verify what's needed and move on. That can reduce a company's exposure if something were to go wrong and helps meet growing compliance expectations."

Industry outlook

With fraud attempts and regulatory pressure both rising, calls are growing for real estate operators to adopt digital identity solutions to strengthen their security frameworks.

"The message is simple: you can't protect your business or your clients against new and evolving threats with outdated processes. Scams are becoming more sophisticated, and regulation, more strict. Now is the time to modernise your identity systems and protect your digital front door.

Digital identity gives you a secure, and seamless way to verify people, reduce fraud, and build trust."