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Don’t lose your deposit: How to protect yourself against real estate scams
Cyber Daily journalist Daniel Croft joined First Property Buyer Show host Emilie Lauer to discuss how property buyers and owners can avoid falling victim to real estate scams that can cost them thousands.
According to Croft, real estate scams have been on the rise and affect all types of property purchases, including deposit, settlement transaction, and deed fraud.
Earlier this year, a first-time buyer lost a $50,000 deposit after falling victim to a phishing email impersonating a conveyancer.
Similarly, last year, an individual was asked to transfer $1.2 million as a deposit, but Westpac flagged the payee as fraudulent, preventing the payment from going through.
“Phishing scams happen in all industries, but in real estate, you’re playing with much bigger fish.”
“You’ve got much, much bigger funds going through,” Croft said.
In addition to phishing emails from conveyancers, Croft said mortgage relief scams were another area to be cautious about.
“You’re struggling with your mortgage, you get an offer that seems too good to be true, and it says, ‘hey, we can modify your loan, or we can give you some mortgage relief, but it’ll be a high upfront cost.”
“You go, ‘great, all right, I can pay however many thousand dollars it is, and then I can get some relief on my mortgage’. They’ll just take that initial payment, and they’ll run.”
Additionally, he said title and deed fraud scams were on the rise, in which a scammer illegally transferred ownership of a property to themselves.
Similarly, renters have also been targeted, where scammers took advantage of prospective tenants by promoting rentals that were too good to be true, then stealing their bond.
“They say, ‘great, hand over your bond, and then the place is yours – we’ll send you over a contract’. You do it, they take it, and they’re gone.”
Croft said that with most real estate scams, recovering the money was extremely difficult, and buyers and owners needed to mitigate their risk of fraud in the first place.
He said there were multiple ways to protect the documents and processes, including enabling two-factor authentication on accounts to prevent scammers from accessing financial and property purchase information.
“Say they do manage to get a hold of your email, username and password, they want to log in … they can’t get in if you enable two-factor.”
“Two-factor authentication allows you to block entry of any login with the power of your phone. While they might be able to try to log in from overseas or another part of the country, they need your physical device to verify that.”
Additionally, Croft warned buyers to avoid making any upfront payments, instead verifying the senders of any emails they received and being absolutely sure about who they were paying.
He advised buyers to use as much human contact as possible, such as speaking to their conveyancer over the phone to verify their identity or check that the phone number matched the one on their website.
“Check everything – once, twice, three times, four times, as many as you can before you’re absolutely sure.”
However, he said that the best way to avoid a scam was to meet the other party in person, even though it wasn’t always practical.
“That is the ultimate way to verify legitimacy.”
Aside from using two-factor authentication, verifying all contacts, and communicating in person, Croft said buyers can protect themselves by learning about scamming patterns and behaviours.
“Just have an understanding of the landscape of cyber and scams. My best advice would literally be to learn the patterns, verify everything,” he concluded.