Consumer Affairs Victoria has advised real estate agencies to ensure their cyber security is up to date, and home buyers to verify any payment instructions, after receiving reports of more than $200,000 in losses from an email scam.
The email scam works by directly hacking the email accounts of real estate agents. Once the agent has sent through a contract of sale and trust account details to a buyer for the payment of their house deposit, the hacker then sends a second email advising the account details were ‘incorrect’.
This email includes details of a false account, which leads to the scammers siphoning the buyer’s funds by getting them to pay to the wrong bank account.
Consumer Affairs Victoria has urged Victorian real estate agencies to consider setting up two-step verification for email accounts and deleting spam messages without opening them.
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Director for Consumer Affairs Victoria, Simon Cohen, recommended buyers double-check any emails that include payment details with their real estate agencies over the phone in order to ensure they are valid.
“If you have purchased a home and receive an email from the estate agent with trust account details to make payment, call the agent or visit them in person to verify that the email is legitimate,” Cohen said in a statement.
Similar scams have resulted in big losses in other Australian states over the past year, with two property buyers in South Australia losing close to $1 million last October through an email scam. The scammers impersonated conveyancers and asked clients to deposit funds into the incorrect bank account.
Value of property transactions means buyers and agents must stay vigilant
Despite reports of more than one of these scams over the past year, chief executive of the Real Estate Institute of Victoria, Gil King, tells SmartCompany these scams aren’t a frequent occurrence.
“Scams are not a frequent issue in the real estate industry, however given the value of property transactions in Victoria it is essential that agents and buyers are made aware of any suspicious activity,” he says.
King says bank transfers have become increasingly common as the method of payment now that median house prices in Victoria have reached $821,000 and cash payments are not a viable option.
Additionally, the government is looking to limit the amount of cash agencies can receive, in an attempt to thwart money laundering. Implementing measures like this will increase the likelihood of ruling out cash payments as a possibility to purchase real estate, King says.
Now that the conveyancing process is increasingly being conducted electronically, King says sending bank account details over email is now commonplace. However, it’s always worth confirming those details with the agency.
“Bank transfers remain the best method to pay for property, however buyers are encouraged to double-check the agency’s bank details over the phone or in person,” he says.