Could you spot a property settlement scam? More than 2 in 5 Australians can’t
You’re days away from settling on a property when an email arrives with the bank details for your final payment. The names are familiar, the message looks legitimate and everything appears to be in order. Would you stop to check before transferring the money?
It is a simple step that could prevent a devastating loss. Property settlement scams are becoming increasingly convincing, and research shows more than two in five Australians cannot identify the warning signs. With deposits and settlement funds at stake, knowing what to look for has never been more important.
What is a property settlement scam?
A property settlement scam occurs when a criminal impersonates someone involved in a property transaction, such as a real estate agent, conveyancer or solicitor.
The scammer may gain access to a professional’s email account or create an email address that looks almost identical to the real one. They then contact the buyer and provide fraudulent bank account details for a deposit or settlement payment.
Because the request appears to come from someone the buyer knows and trusts, it can be easy to assume it is legitimate. The money is transferred, but instead of reaching the intended recipient, it goes directly into the scammer’s account.
In some cases, the fraud is not discovered until the real estate agent or conveyancer follows up about the missing payment. By then, the buyer may have lost tens or even hundreds of thousands of dollars.
Why are these scams so difficult to detect?
Fraudulent emails can use familiar names, business branding and language that closely resembles genuine correspondence. Sometimes, the only visible difference is a single letter, number or symbol in the sender’s email address.
Timing also plays a role. Scammers often target buyers during the final stages of a property purchase, when there are multiple deadlines, documents and payments to manage. An urgent request can easily appear to be another routine part of the settlement process.
In a simulated scam email, almost all survey respondents failed to notice that the sender’s email address was fraudulent. It is a timely reminder that these scams are not always obvious.
Warning signs to watch for
Be cautious if you receive:
- New or changed bank account details
- An unexpected request to transfer money
- Pressure to make a payment immediately
- An email address that is slightly different from the usual address
- Instructions telling you not to contact another party
- Unusual spelling, formatting or changes in writing style
- A request to bypass the normal payment or verification process
Urgency is one of the most common tactics used by scammers. The aim is to make you act quickly before you have time to question or verify the request.
How to protect yourself
A useful approach is to stop, check and protect.
Stop
Pause before transferring money, particularly when a payment request is unexpected or the bank account details have changed.
Do not allow an urgent deadline to prevent you from checking the instructions. Taking a few minutes to verify the details could protect you from a significant financial loss.
Check
Confirm payment instructions directly with your conveyancer, solicitor or real estate agent before transferring funds.
Use a phone number you already know or obtain it independently from the business’s official website. Do not call the number contained in the payment email, as a scammer may have changed that as well.
Confirm the account name, BSB, account number and payment amount verbally. You can also ask whether the professionals assisting with your purchase use a secure document or communication platform.
Protect
Pay attention to any Confirmation of Payee warning displayed by your bank. This service checks whether the name you enter matches the name linked to the receiving account.
If the details do not match, stop the payment and investigate further.
If you believe you have transferred money to a scammer, contact your bank immediately. Acting quickly may improve the chance of the funds being stopped or recovered.
Stay informed throughout your property purchase
Most property settlements proceed smoothly, but it pays to remain cautious whenever you are transferring money.
At Loans Australia, we keep our clients informed throughout the finance process, including what happens next, what information may be required and who to contact if something does not look right.
If you are buying a home or investment property, speak with our team about planning your finance and preparing for settlement.