SAFEGUARDING YOUR DEPOSIT
Category Advice
When you've bought a property and signed the Offer to Purchase (OTP), most sellers require a deposit of 10 percent. It's understandable - they want a sign on your part that you're committed to buying the property.
So, where does that money go and how does it get there? How do you know if it's well protected from the increasing incidences of cybercrime, phishing, malware and more. This is likely to be the largest sum of money you've ever dealt with - a property is one of, if not your biggest expenditure in life. You need to be certain the money is safe as, well, houses.
When you sign that OTP, the seller usually gives you options of what you can do with your deposit: either invest it into the real estate company's trust account, or into the trust account of the attorney (who the seller chose to do the property transfer). You'll be earning interest.
Your concerns will naturally be about safety and security of your deposit, and the best return on your money while you wait for the property to be transferred and registered in the Deeds Office - three months and upwards.
WHAT IS A CYBERATTACK?
We all know there's been a significant global rise of artificial intelligence (AI) and machine learning (ML). What has this to do with your money? Cyberattacks are very real, usually taking the form of malware, which is software designed to disrupt, damage or gain unauthorised access to bank accounts to access sensitive information or even remove or transfer funds.
To indicate the size of the threat, there were no fewer than 30 million new malware samples detected in 2023, reports The Independent IT-Security Institute AV-Test - that represents hundreds of millions in financial losses internationally.
We hear about scams every day. You may even have been 'caught' in this way, often via inadvertently clicking on a well-disguised link or downloading a programme which in turn, infects your device with malware.
Because of the scale of the problem, the property industry has been forced to sit up and pay attention to this, largely because of the vast sums of money being transferred in their sector. Another factor too, is that first time homeowners are increasing the size of their deposits, and this could potentially be another 'market' for malware attacks.
WHAT'S BEING DONE, AND WHAT CAN YOU DO TO PROTECT YOURSELF?
The good news is that technology around AI and ML is advancing. The bad news is that - and they - play both a negative and positive role in curbing malware attacks.
On the one hand, Artificial Intelligence-powered detection systems are increasingly used to identify behaviour patterns which indicate a cyberattack; and on the other, AI-powered malware can use machine learning to bypass anti-virus and anti-malware programmes.
Currently, the most challenging aspect is that it's possible to generate near-authentic-looking phishing emails - we've all seen them, with logos, wording and a credibility that tricks you into believing it's a letter from your bank or cell phone company. If that cyberattack is successful and can access the email address of the parties involved in a property transaction, they can use malware software to trick, often with disastrous financial implications.
WHAT IS 'BUYERS TRUST'?
Buyers Trust - a cybersecure bank-hosted deposit solution for homebuyers - is a worthwhile option to consider when choosing where to place your deposit. Jackie Smith heads it up, confirming that the rise in malware attacks has affected the property industry. She chatted on Moneyweb: "If you look at the property eco-system, this is probably where the highest amount of money transactions take place. So, what you find is that because there's a purchase of a home whether people are buying it cash, or even taking out a bond - a deposit has to be paid...we are seeing trends that the property eco-system, mostly because there's big exchanges of money involved, it is under attack."
What financial protection is in place for both buyers and sellers if they should fall victim? "Start by dealing with a reputable company, and make sure they have a significant level of protection."
The Buyers Trust platform operates as a transparent and safe third-party alternative platform where buyers can entrust their deposit: "We have taken a number of additional measures to ensure security in light of these AI- and ML-enabled malware advancements. Chief among them are multi-factor authentication (MFA) and encrypted communications."
"MFA is a powerful tool," says Smith. "It goes beyond asking a user to verify their username and password. It requires two or more factors to verify a user's identity and grant them access to an account. This can include face ID or fingerprint scanning - biometric security measures that are near impossible for the majority of cybercriminals to impersonate."
Smith recommends that homebuyers avoid sharing banking details or other sensitive financial information over email and instead communicate via a secure encrypted platform or a verified WhatsApp Business Account which uses the Signal encryption protocol.
"As a general rule of thumb, if you are entrusting your hard-earned deposit to another individual rather than keeping it in your own name on a secure platform, ensure that you speak to them over the phone or in person to verify the legitimacy of their banking details and to ask what security measures they have in place."
"If you suspect malware on your device, immediately disconnect it from the internet and consult a trusted cybersecurity professional for instructions on removing the malicious software," Smith concludes.
Buyers Trust is a part of the respected ooba Group that pioneered the home loan origination industry in South Africa more than two decades ago.
www.buyerstrust.co.za
Author: Wakefields Real Estate
