A hot topic in Canadian real estate right now is fraud and in particular money laundering. One only needs to look at what is happening on the West Coast to understand how important it is to know exactly where the money for your deal is coming from. As a realtor and/or broker your license and hard earned money are exposed every time you take a client’s deposit.
As we are expanding our product out into new markets, we are getting a chance to speak with a lot of new and potential clients about how they currently move money. Not surprisingly, many are accepting email money transfers. Now to be fair, there is nothing inherently wrong with accepting them, so long as you are capturing all of the right information. The issue is that the platform itself in inherently flawed, with no way for you to guarantee you know where the money is coming from.
First, when sending an email money transfer, the sender is able to set the name, email, and phone number to whatever settings they want. Below is what I was able to send an email money transfer as with my financial institution:
This means that any email money transfer you accept could come from just about anyone. The system provides you with no way to validate where the money comes from, besides what the user entered into their settings, as shown in the transfer notification from Interac below:
When you leverage ExactDeposit in your deposit process, the sender actually logs into their bank and allows us to validate their identity against the records the bank has on file. In this way, ExactDeposit can say definitively who sent you the money and from where.
Second, in order to deposit an email money transfer in a compliant and timely manner, a trusted human must manually complete the transaction using the correct password and then fill out all of the necessary paperwork.
When ExactDeposit is used in your deposit process, no manual intervention is required, and all paperwork is completed for you, meaning that your admin staff is available to complete more valuable tasks.
Third, the email money transfers are only as secure as the email address and password. In speaking with many brokerages that accept email money transfers, in order to reduce administrative overhead, a common password is given for all deposits. This means that anyone who has or could get access to the email box has access to all of your received email money transfers, and would be able to deposit them into an account of their choosing.
The ExactDeposit process prevents this by having the purchasing agent select the destination trust account from a previously verified list of trust accounts. Money is transferred from the source account to the destination account directly with no possibility of human intervention.
So the question really is: How much is reducing your’s and the brokerage’s exposure to fraud and money laundering worth? Is it worth $5.99 a deposit to guarantee that the deposit you are receiveing is coming from a known source, that it is going to get where it needs to go, and that it does not create a burden on your admin staff?