As in many other industries, cybercrime is on the rise in real estate and can be financially devastating for victims. So property buyers, sellers, tenant and landlords, as well as estate agencies and attorneys all need to stay informed and prepared to avoid being scammed.
Cyber criminals have already found ways to dupe property buyers out of purchase deposits, for example, and have done so in more than one case we are aware of. The usual way they do this is to hack into a conveyancer's computer system and substitute a legitimate request for a deposit to be paid into the attorney's trust account with a request for those funds to be paid into their own bank accounts.
There has also been at least one case of a cash buyer depositing the whole purchase price into a false account.
The answer to this is for homebuyers never to pay the deposit until they have called the transferring attorney themselves and confirmed both the payment request and the correct bank account numbers - and the same principle applies to the payment of rental deposits that appear to have been requested by an agent or agency.
In fact, most reputable rental agencies won't ask you for a deposit until you have viewed the property and have a signed lease in your hand.
In addition, consumers should never, ever, under any circumstances, share their ID numbers, bank account numbers, passwords or one-time password (OTP) with anyone who texts them or calls asking for this information. Just keep in mind that neither your bank nor a reputable agency like Chas Everitt will ever do this - and that anyone who does is almost certainly aiming to steal your ID or raid your bank account.
Meanwhile, tenants need to be increasingly vigilant to avoid several types of rental fraud. Despite the best efforts of the SAPS, top IT experts, private investigators and several leading agencies, these have proved really hard to combat as they mostly take place on social media, and the swindlers change their names, numbers, profiles and bank accounts all the time.
In one of the most common scams, they will "scrape" photos from real rental property listings and then advertise these properties to let at bargain rates while pretending to be a real estate agent. When prospective tenants respond to the ads, they will be told that there is such keen interest that they need to pay a holding fee or good faith fee to a certain account for the chance to view the property - and will then be ghosted as soon as they have paid that fee.
Consumers need to be aware that this type of fraud usually happens via social media rather than on major property portals. We encountered one case recently where someone created a fake Facebook profile and timeline pretending to be a legitimate estate agent, advertised various properties with a WhatsApp response option so that potential tenants would be reassured that their conversations were encrypted, and then duped them out of all sorts of personal information as well as holding fees and deposits.
Another common rental scam is the holiday property that doesn't exist. Once again, it will be advertised with fake pictures and those who try to book it for their next getaway will be asked for a deposit, or maybe even whole rental payment before they arrive, only to find there is nothing there, or that what is there is definitely not the holiday home that was advertised.
Alternatively, fraudsters will sometimes let a holiday home for a certain period to several different people - all of whom will be instructed to pay a deposit (to a bogus account, of course) and will arrive only to find that they have been cheated out of both their money and their holiday.
Once again, the answer is not to hand over money just because someone tells you to. You really do need to confirm, every time, that the person you are dealing with is actually an agent and that any bank account where you are being asked to deposit funds is legitimate. It is unlikely, for example, that an estate agency business account would be in the name of an individual.
Real agents representing reputable agencies are also likely to have company email addresses, and it is easy enough to make a call to an agency to confirm whether an agent does actually work there, and have the same contact details you have been given.
On the other side of the coin, landlords also need to become more vigilant now to avoid heavy losses due to fraud.
It is unfortunately increasingly common for prospective tenants to fake IDs, payslips and bank statements in order to be approved for rentals - and then bully landlords into handing over keys before they have paid a deposit or signed a lease.
And of course once they have taken occupation of a property, it is extremely difficult, time taking and costly to evict them, even if they have not paid any rent or city council charges, and even if they've trashed the property. Then when they do leave, the landlord faces the costs of repairs, maybe several months of vacancy and the expense of finding another (hopefully better) tenant.
To avoid this, landlords are strongly advised to work with established rental agencies that have the systems and resources available to help them eliminate grifters from the outset.