Stealing from trust accounts is not just a plain bad idea – it’s illegal

It would seem logic would prevail that stealing from your trust account would be a bad idea, yes? Unfortunately for some, this is not a clear-cut decision.

Earlier this month, as reported by www.news.com.au, a Victorian Real Estate Agent, 43 years old from Huntingdale, was sentenced to 40 months jail for misappropriating over $1.9 million dollars worth of clients’ cold hard cash. Yes, you read that right – $1.9 million.

Firstly, how any agent could fathom they could get away with this type of extreme financial scandal is unthinkable. Do they think that no one will notice these missing millions? That questions won’t be asked and figures requested to be verified at audit time? It’s not a case of ‘mum I lost my canteen money’. This is millions and millions of other people’s money.

The agent has since pleaded guilty to the skimming of the funds. He admitted they were used to run his own real estate business. Nothing like keeping it in the family…

It is stories like this that threaten the trust that consumers have with real estate agents and the handling of trust accounts. Which is why we believe that trust accounting should be it’s own separate qualification. Just like you need a qualification to practice law or accounting.

Tightening Regulations

It is critical that the industry is well-regulated and stringent audits occur so that rogue agents are farmed out. Unfortunately there have been some cases of agents are obtaining licenses unlawfully which is also tarnishing the industry.

The majority of agents do the right thing. They follow their legal responsibilities when it comes to trust accounting. But it just takes one bad apple to turn the whole bunch sour.

The reality is if you do take funds from your trust account without proper authority, you are committing a crime. It is definitely not worth the risk to both your career and your livelihood. Unless a good stint in jail is on your agenda.

So don’t try and play monopoly with the law. Trust money is not your money. Let’s leave it where it belongs.

What are your thoughts on industry regulations when it comes to trust money? How could it be better regulated and what are some of the steps and measures you take in your office to prevent fraud? We’d love to hear your feedback & comments.

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~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 18 years industry experience. Don’t trust just anyone with your trust accounting. Trust End of Month Angels and get back to what you do best – growing your business.