Home deposits at risk as scammers circle buyers

Australians lost $2.97 billion to scams last year, according to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, with investment and finance-related scams the most common. 

With the an average-income Australian household taking five-and-a-half years to save a 20% deposit on a median-priced home, losing money to scammers can be devastating.

Scams relating to banking, brokers and conveyancing are important to be aware of – and the ACCC's Scam Awareness Week aims to bring these cons to light. 

These are some of the most common scams to be aware of when trying to save for and purchase your dream property. 

Saving a deposit? Watch for imposter bond investment scams…

One of the most common finance-related scams, imposter bond investment scams are where a scammer will pretend to be from a bank or financial services company.

Property seekers hoping to grow their savings are at ongoing risk, with offers of fake bonds or fixed term deposits both floating around as text messages, phone calls, emails and even social media ads. 

The ACCC and the national corporate regulator, the Australian Securities and Investment Commission, have both issued warnings about imposter bond investment scams in recent years. The big four banks and even the government all face regular occurrences of imposters contacting savers and purporting to be genuine.

It’s easy to get caught out by any of these, with moneysmart.gov.au noting these scams do not always include easy-to-spot elements that clearly make them 'too good to be true'.

If you’re looking for a better deal to boost interest on your deposit, speak to your current bank or a finance professional directly to weigh up your options, rather than accepting a cold offer.

You can then flag any surprise offers you have received with them to confirm their authenticity – or otherwise. 

Scammers can also claim to be associated with a bank or financial institution where you are already a customer, so it’s important to keep yourself up to date and familiar with how your bank contacts you, so you can spot any unexpected changes to this.

You can keep yourself safe by contacting your bank through an encrypted and safe channel, such as its official app.

Preparing to meet with a broker? Watch for loan scams… 

A mortgage broker is usually one of the first professionals home-buyers will contact to help paint a picture of what you can comfortably afford.

Mortgage lenders often pay the broker fee or commission, so you should not have to pay any fees to a broker. It's important to ask a broker how they will be paid, as well how they will ensure that your communications and payments to your lender made through them are secure.

Sydney-based Mortgage Choice broker Chantelle Rangel explains property seekers should always check a broker’s official website and the contact details of its brokers to build a clear picture of who they are dealing with.

“Save their details and ask them what the process will be when they are submitting an application,” Ms Rangel says. “Typically, most brokers will have an administrative team that will reach out to ask for details up front, and you know who's going to contact you.”

She warns savers not to send financial or personal information to anyone they do not already know.

“If your broker has not advised you that someone will be in touch from a bank or their valuations team, always check with your broker and then request a call back,” she adds. “Don't give anybody your information if they are calling off the bat and you have not been made aware of it.”

Ms Rangel explains savers hoping to get on the property ladder should always feel comfortable double-checking things with their broker or bank and sharing any concerns about scams.

“If you're feeling odd, just always verify it,” she says. “Don't be afraid, because awareness and open communication will greatly enhance your ability to identify and avoid scams.”

About to exchange contracts? Watch for conveyancing scams…

Scamwatch has warned this week that scammers are using increasingly specialised financial knowledge and often provide false information, documents and information to lure savers into believing their legitimacy.

Attempts to gain personal information are the first stages to accessing money fraudulently. Hacking and phishing are common methods used, though remote access scams are also on the rise.

Both are prevalent when it comes to conveyancing and securing legal help to negotiate your way to a home loan.

Lawyers have issued warnings after an uptick in ‘settlement scams’ last year, which see hackers intercept fund transfers from property seekers. In this scenario, a scammer poses convincingly as legitimate conveyancer who has already been working with a prospective homeowner.

Just like in communications with brokers, ensure you are aware of all the legitimate contact details of your conveyancer and check in advance what method you will use to pay them and at what point in the process this is expected.

Being prepared can protect you from falling victim to a prepayment scam where a scammer could post as a conveyancer and request early or upfront payment.

To mark Scams Awareness Week, the government’s National Anti-Scam Centre has outlined support options for those impacted by scams, which includes signposting to Australia and New Zealand’s national identity and cyber support service, IDCARE.

“People who have had money stolen should not feel shame when they’ve been targeted by sophisticated criminals,” ACCC deputy chair Catriona Lowe said. “We all have a part to play in shutting down criminal scammers and by talking to each other, we can make sure no one is alone in the fight against scams.”

Scams Awareness Week is an annual awareness raising campaign delivered by the National Anti-Scam Centre on behalf of the Scam Awareness Network. The theme for 2024 is ‘Share A Story, Stop A Scam’.