Buyer beware: The house deposit scam you need to know about…

Buyer beware: The house deposit scam you need to know about…

Here at relatable, we want you to be aware of a very nasty house deposit scam that is going a little bit under the radar despite efforts from the Real Estate Institute and the Law Society to publicise it.

If you are caught by this scam the consequences can be devastating.

The scammers have found a way to intercept payments of deposits on real estate purchases and other legal and real estate transactions. The funds scammed this way have not (to our knowledge) been able to be recovered so the impact has been very hard on those concerned. Scams capturing tens of thousands of dollars have been recorded.

How does this house deposit scam work?

The first step the scammers take to is hack and monitor emails from legal firms and real estate firms.

Using knowledge stolen from the emails one scam is to send purchasers making offers and completing a deposit as part of their purchase fake emails and attached invoices pretending to come from the Real Estate Firm or Law Firm with a fake trust account to pay your deposit funds into.

Once paid in the funds are lost.

Firms are working to avoid this scam but as we said it is a bit under the radar and we wanted to let you know what actions we would currently recommend you take to avoid being a victim.

To avoid the deposit scam the recommended method is this –

When you receive a request to pay money to a Trust Account (or any other amount like advertising and promotion expenses) from a law firm or Real Estate firm we recommend you phone the person you have been dealing with (using the flyer or online advert preferably) and ask them to read out to you the account name and number you are being asked to pay money into. If they match fine, if they don’t then the fake email and payment request should be reported to police. You can ask your salesperson to do that for you if you wish.

We would ask that you note the scammers have faked the phone numbers in emails and attachments so if you call the number provided in the request for funds you may just be talking to the scammers themselves. You need to call a number you have been dealing with or from the website for the firm you are organising to pay money to.

There is a strong potential for this scam to broaden to other transactions but for now, the rich pickings seem to be real estate deposits. So please beware and take precautions no matter who sends you a request for funds.


Sources for this blog include:

Herald article extract

The real estate industry body has sent out a warning and advice to its members about how to avoid a new scam targeting home buyer’s deposits.

 (Banking ombudsman Nicola Sladden) said real estate agents and lawyers were being targeted by a sophisticated “invoice scam” in which fraudsters hack into the email of those companies and then send out legitimate-looking invoices.

Instead of the invoice having the bank account of the law firm or real estate agent it is replaced by a scammer’s account number.

Bindi Norwell, chief executive of REINZ (Real Estate Institute of New Zealand) said it was aware of a handful of incidents around the country where scammers had targeted home buyer deposits through lawyers and estate agents.

“We have alerted our members to this issue and are in the process of developing a guidance sheet for agents around how to avoid cyber fraud.”

In the meantime, Norwell said it was advising agents to encourage their clients to phone
and check the bank account number directly with the law firm or real estate agent prior to making a transfer.

Rainey Collins December 2018 Newsletter

Real estate agents (and lawyers) are being targeted by sophisticated “invoice scams”.

Scammers are intercepting emails between a client and an agent and modifying account details that are provided by way of email.  It is important to note that PDF attachments are also being altered, not just account details provided in the body of an email.

This “invoice scam” is a significant increase in sophistication for fraudsters and it is necessary for agents to take steps to avoid falling victim to them.  This could occur when a purchaser is making payment of a deposit to an agency, or when an agency is paying a balance of commission to a vendor or law firm.


Author:

John Duncan - Wellington real estate agent

John Duncan

Wellington real estate agent and member of the Relatable team.

0274417154
john@relatable.co.nz

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Andrew Duncan

I love working with nice people, enjoying plant-based food, CrossFit, NFL and living in Wellington, New Zealand.

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