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How to avoid property fraud

tax-and-legal-advice
1 minute read

How to avoid property fraud

by Emma Ryan 20 August 2020 1 minute read

Investors are being warned after new figures showed a rising number of property frauds involving the use of false bank accounts.

How to avoid property fraud
August 20, 2020

A statement from NSW Fair Trading said the 2020 calendar year has so far seen a number of property frauds. The primary scam that is being carried out is when an agent emails the purchaser the trust account bank details for the deposit, or the vendor emails the agent the account details for the settlement funds.

“The scammer will intercept this email and modify the payment details, providing alternate banking information linked to an account the scammer has access to and sends this back to the purchaser or agent, who then pays the money into the fraudulent account,” NSW Fair Trading said.

“Often, the email the offender sends to the purchaser or agent mimics the original email sent from the agent or purchaser, with small changes to give the appearance of legitimacy.

“Once the money enters the account, it’s generally spent within a week before the account is closed.

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“Real estate agencies should have procedures in place to reduce the potential for fraud in real estate transactions.”

NSW Fair Trading’s top tips for avoiding property fraud

1. Do not provide trust account bank details to purchasers solely by email. Email is not secure and can be compromised without knowledge, meaning your email could be intercepted and your trust account bank details modified, so the purchaser pays the funds to the scammer and the funds are lost.

2. Agencies should use at least two forms of contact to verify all transactions and provide the trust account details personally, verbally by telephone, or by text message. If the purchaser insists on receiving account details by email, warn them that there are risks and to contact you or your agency directly to verify the account details before it is paid. Don’t send this advice by email or it may be modified by scammers.

3. When settlement occurs, also be wary of account details provided by vendors by email. Obtain the vendor account details as part of the managing agency agreement and always follow up changes by email with a telephone call to verify the details prior to making any payment.

How to avoid property fraud
How to avoid property fraud
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About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]Read more

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