Property transactions involve big bucks – and that makes them a big target for scammers. With large sums of money at stake, we reveal what to look out for, and how to protect yourself from property settlement scams.
Mention ‘scams’ and it’s easy to think of dodgy investment schemes or fake online stores that take your money and never deliver the goods.
But scammers are getting smarter, and this Scams Awareness Week, we’re highlighting the dangers of property settlement scams.
Hopefully it will never happen to you.
But a recent survey found 42% of Australians couldn’t pick the warning signs of a property settlement scam.
Here’s what to look for – and how to stay safe.
What are property settlement scams?
Property settlement scams are one of the most financially devastating forms of cyber-crime in Australia, according to digital property settlement platform, Pexa.
That’s because the scammers target large sums – such as a homebuyer’s deposit.
The Australian Cyber Security Centre (ACSC) explains how the scams commonly work.
It starts with cyber-crooks hacking into the email accounts of real estate agents, conveyancers or even solicitors.
From there, they send fraudulent emails to customers who are in the process of buying a property.
The scammers insert the details of their own bank account for settlement payments to be made to.
Victims assume the payment request is real, and unknowingly send money to the cyber-criminal’s bank account.
The ACSC says these scams can go unnoticed for weeks, often only being picked up when the real estate agent or conveyancer follows up on the missing payment.
Meanwhile, the homebuyer may have lost tens of thousands of dollars, and potentially far more – money that was earmarked to buy a place of their own.
Property scams are becoming harder to detect
As scams become more sophisticated, they are becoming harder to detect, says Pexa.
Adding to the challenge, scammers strike during the final stages of a property purchase – a process many people are unfamiliar with.
So just how difficult is it to spot a scam email?
Harder than you may think.
Four in ten (42%) respondents to a Pexa survey couldn’t detect any scam markers in a simulated email, and a staggering 99% couldn’t spot the use of a fraudulent email address.
That’s because the fakes can be remarkably similar to the real thing.
Red flags to watch for
Several telltale signs may indicate a scam email.
These can include a slightly altered email address, and a change to the bank account details you’re required to deposit money into.
One of the biggest red flags is that you are pressured to pay immediately.
Creating a sense of urgency is a common scam tactic used to scare people into acting fast before they can check if the request is legitimate.
How to protect yourself
Scamwatch advises taking three simple steps to protect you and your money from scammers: Stop. Check. Protect.
Pexa explains how these can work when you’re buying property:
Stop: instead of acting under pressure from a scammer, pause if you receive an unexpected request for money or changes in payment instructions.
Check: verify the payment request independently, either in person or by calling the property professional on a known number. Don’t simply dial the phone number listed at the end of the email – scammers may have inserted their own number there too. These days, many property purchases are facilitated by encryption platforms, so while you’re chatting, check if this is available.
Protect: take Confirmation of Payee warnings by your bank seriously. These let you know if the name of the account you’re sending money to doesn’t match the name you’ve entered.
Need more information?
Rest assured, most homebuyers enjoy smooth sailing with their property purchase.
And we are always keen to explain how the homebuying process works to keep you well-informed.
Call us today for help on your home loan journey.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
