Search
  • Magdalene Chong

Ways to Identify & Prevent Trust Account Theft

Updated: Apr 7

It is very crucial act to protect your agency’s trust account from fraud, as clients’ have put their trust in your agency to hold their money. Therefore, failure to do so will not only resulted in severe penalties, but it can also tarnish the reputation of the agency or franchise, while serving to heighten distrust of the real estate industry.


So, what is trust account theft? Trust account theft simply means the trust account funds are misappropriating. A trust account is non-interest bearing, which main purpose is to securely hold money on behalf of a client, and it must not used for any purpose besides holding funds to complete a sale or rental transaction. There are many ways that trust account theft can happen, but one of the most common crimes regarding trust account is the transfer of funds from the account to an agent’s personal or general account. Imprisonment, fines, agreement to pay back funds and suspension are some of the penalties for trust account theft.


You might be thinking, who would commit trust account theft and why? In real estate agency, Property Managers, Bookkeepers, Receptionist, and sometimes even the Partners and Directors would be committed to trust account theft. One of the main reasons that was cited for committing trust account theft was ‘ready availability of funds’.


Here are ways to identify fraud.

  • Firstly, regularly conduct audit on your trust account. By doing so, you could confirm payments as legitimate. The trust account software that you are using are also an important tool as you can easily print reports or receive notifications detailing important changes made to accounts. If there are any suspicious changes to the trust account software, take steps to check employee payrolls and similar.

  • Secondly, all the trust account reports need to be thoroughly checked, even the ones confirmed as successful. This is very important, and you must make sure bank account balances match with bank reconciliations. If there are irregularities or outstanding deposits, please pay close attention to the legitimacy of these transactions and investigate further if required. A third-party annual trust account audit can minimise the chance of long-term fraud and ensure that your agency stay complaint with the law.

  • Lastly, employee behaviour is one of the signs to look at too. Statistically, trust account theft is linked to behaviours like shopping, gambling and drug and alcohol use. It is important for the well-being and safety of all staff members to ensure everyone is compliant and understands the legal ramifications of trust account theft.

Here are some measures to prevent fraud.

  • All bonds receive must be lodged directly with the RTBA. You must make it a rule to NEVER accept cash in your business. If you continue to accept cash, make sure that your staff will bank in the money immediately and reconcile daily.

  • Do not provide staff with full access to bank accounts. Partial or limited access is advisable and only selected staff should control payments from trust accounts.

  • Always update your staff on the current legislation by offering relevant training which include compliance information sessions and procedures to make them alert and identify any system irregularities.

If trust account bookkeeping is not your forte, we at Graphite Business Advisers, we have a dedicated team leaders that will look after your trust account. Contact us now at 1300 82 84 86 or email us at info@gbadvisers.com.au.

1 view0 comments

Recent Posts

See All

It has come to our attention that the ATO is warning tens of thousands of directors to take action on company tax debts or face the risk of full enforcement action. Who is at risk and what is the pote

There are lots of reasons to keep fit but very few of them have to do with how we earn our income. As a result, a tax deduction for a gym membership isn’t available to most people. And yes, the Tax Of