More on Trust Accounts: Maintaining security & Audit reports final reminder - Settlement agents bulletin 93
26 September 2019
Maintaining trust account security
Consumer Protection recently learned of a trust account scam attempt made via payment from the trust account to a credit card. Fortunately the agent caught the transaction as part of a regular account audit and remediation is underway with the credit card company to recover the funds.
This incident presents a good opportunity to revisit the requirements and best practices for maintaining trust account security.
A trust account should never be linked to a credit card. Doing so puts the account at risk of fraud or theft should the card be lost or compromised.
All withdrawals from a trust account should be made only by electronic transfer or a trust cheque.
Where a trust cheque is used, you must retain the cheque butts and ensure they contain all relevant information. Importantly, do not ever pre-sign cheques! You will place clients’ trust moneys at considerable risk if trust cheques are pre-signed prior to all of the other details (particularly payee and amount) being written. It may also be prudent to ensure that all trust cheques are clearly endorsed “not negotiable – account payee only” and if the cheque is pre-printed with the words “or bearer,” these words are struck out and replaced with “order.”
When fraud or theft occurs
If you realise money has been stolen from a trust account, you must:
- notify the Commissioner, advising the date on which the theft occurred, the amount involved, the reason for it and any action taken to correct it;
- contact the auditor to conduct a special trust audit to attempt to quantify the amount of the misappropriation and possibly identify the culprit;
- notify the police of the misappropriation of trust money and that a special audit is being conducted;
- replace the misappropriated amount immediately; and
- alert your professional indemnity insurer.
Regular monitoring of trust account transactions and account balances may help prevent the successful fraudulent transfer of money from your trust accounts.
Remember, the removal of money from a trust account for reasons other than a lawful purpose is a criminal offence. This includes when an account is compromised or scammed.
Last call for audit reports: deadline of 30 September is imminent!
All agents who hold a current triennial certificate and have held or received monies in trust during the financial year ended 30 June 2019 must lodge an audit report with the Commissioner for Consumer Protection by 30 September 2019.
Agents who have not held or received monies in trust during the financial audit year ended 2019 should submit a Declaration of no receipt of trust funds in lieu of an audit report.
An infringement notice may be issued where an audit report or declaration of ‘no receipt of trust funds’ is received after 30 September 2019, or not at all.
We encourage agents and auditors to submit audit reports and statutory declarations to the Commissioner via email.
Have questions about the audit process?
For more information see the Settlement Agents’ trust account handbook.
You can also contact the audits team at email@example.com or on (08) 6251 2721.
Have your say: Regional Services Review
The Department of Mines, Industry Regulationand Safety is inviting public comments on its Regional Services Review. The department’s 14 regional offices are crucial in providing frontline customer service throughout Western Australia. Following extensive consultation and investigation, a number of proposals are outlined in the review.
A tiered approach for regional service delivery is proposed, with regional offices operating as either Customer Service Hubs, Customer Service Centres, Resource Tenure Offices and Mines Safety Offices. The review also highlights the need for regular stakeholder engagement with regional communities, and the need to work with other agencies to develop strategies for regional staff attraction and retention.
The consultation paper is available at www.dmirs.wa.gov.au/consultations. Consultation is important to the department, and you are encouraged to provide feedback by 5pm Monday 28 October. All responses will be considered before final recommendations are provided to the Minister for Commerce and the Minister for Mines and Petroleum.
For more information, please email firstname.lastname@example.org.
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