Mortgage discharge letters and AI confidentiality: what a payout letter gives away in ChatGPT or Claude.

A letter about discharging the vendor’s mortgage is routine, polite and exact, which is why staff hand it to ChatGPT or Claude for a clean redraft. It carries the lender, the payout figure, the account the proceeds will go to, a request to redirect them and the vendor’s movements over the coming fortnight. Those are the details a payment redirection fraud needs, on both sides of the transaction. This page marks every item in a routine discharge letter from the buyers’ conveyancer to the vendor’s solicitor that bears on NSW record, Scamwatch and privacy obligations, and shows the same letter drafted on Ermos.

The mortgage discharge letter

Sent to the vendor’s solicitor in the weeks before settlement, to confirm the mortgage will be discharged, the figure to be paid and where the balance goes.

An invented letter. The folio, dealing number, BSB and account numbers are placeholders. Hover or tap any highlighted item for the analysis; the full list is below.

What leaves the practice

1. 1
   The vendor’s solicitor

   A named lawyer and the name of her practice, written to by the other side. The identity of the person whom a fraudster would impersonate to ask for changed details.

2. 2
   The property, folio and settlement time

   A live transaction, with the date and time at which money moves. Scamwatch describes payment redirection as impersonating a business to ask that an upcoming payment go to another account, and a letter that states both is what such a request is built from.

3. 3
   The vendor’s mortgagee and the dealing

   The bank that holds the mortgage and the registry reference of the mortgage. Financial information about the vendor. Privacy Act guide.

4. 4
   The payout figure and loan account

   How much the vendor owes the bank and the last digits of the loan account. The vendor’s own financial information, and a number the bank would recognise as genuine. Privacy Act guide.

5. 5
   The vendor’s proceeds account

   The account the vendor will be paid into, set out with the amount. The destination a fraud wants to change.

6. 6
   The vendor’s movements

   Where the vendor will be, and when the unit will be empty or full of packing. Personal information about a third party that has no place in the draft. Privacy Act guide.

7. 7
   The request to redirect the proceeds

   An account change request, how it arrived and how the practice will check it. Scamwatch advises verifying changed details by calling a number you already hold, which is exactly what this paragraph sets out, and a fraudster would be glad to read it.

8. 8
   The buyers’ funding position

   The lender, the advance and the date the balance will be in trust. Tells the other side, or anyone else reading, how the buyers are funded. Privacy Act guide.

9. 9
   The signatory

   A named licensed conveyancer who signs for the practice. The NSW licence register is public, so the name is not secret, but it identifies who is responsible for the letter.

What happens in Frontier Models (ChatGPT, Claude)

• The whole document is transmitted to the provider’s servers. On personal plans the user cannot choose where it is stored or processed, and for the major providers that has generally meant outside Australia, under that country’s legal process. Some business plans offer storage in Australia, but the provider still receives the content.
• On consumer tiers, prompts can be retained and used to train future models.
• The provider’s staff and systems can reach the content under the provider’s own policies.
• Once sent, the practice no longer controls it. Retention and deletion happen on the provider’s terms.

The same document on Ermos

Part of AI data leakage in conveyancing practices.

Common questions