How to stay safe from settlement scams when buying a property

Scammers are everywhere – and AI is helping them trick us.

AI is everywhere. It’s on our feeds, it’s in our news and it’s in our homes. It’s also in the hands of scammers – which is a major problem when it comes time to settle on a property purchase.

SETTLEMENT SCAMS

PEXA Chief Information Security Officer Graham Fairley says Australians should be wary of property settlement scams, where huge amounts of money – maybe even a buyer’s life savings – can be stolen in a matter of minutes.

“Property settlement scams in particular are some of the most financially devastating forms of cybercrime, in which scammers use business email compromise to trick victims into sending money to the wrong bank account,” he says.

Graham Fairley, Chief Information Security Officer, PEXA. Picture: PEXA

Considered a “false billing scam” by ACCC’s Scamwatch, settlement scams most commonly occur when a scammer poses as the real estate agent or solicitor that a buyer has been interacting with and demands they pay funds into a different bank account.

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“Real estate transactions are among the top targets of ‘buying and selling’ scams in Australia, targeted because they involve large sums of money being exchanged over a short period of time,” Fairley says. “The most common method for sending bank details remains email, followed by an in-person exchange – both of which can be intercepted.”

The process of finding a dream home is one thing. Settling it is another.

HOW SETTLEMENT SCAMS WORK

While Scamwatch doesn’t collect data on property settlement scams specifically, there were 27,045 false billing scams reported to the agency in Australia last year costing Aussies more than $15,818,244. So far, this year, more than $19,370,178 has already been lost and 11,602 scams reported.

A Scamwatch spokeswoman says it’s crucial to carefully check and verify emails from businesses demanding payment by contacting them using an independently sourced phone number.

Hackers can access your information by impersonating your selling agent or conveyancer.

“False billing scams can take several different forms,” the spokeswoman says. “In some instances, scammers hack into a legitimate email account and pose as the business, by intercepting legitimate invoices and amending the bank details before releasing emails to the intended recipients.

“Sometimes a change in payment details is the only sign of the scam. Other times, payment redirection is done by spoofing, when scammers impersonate staff members using an email address which is either masked to look exactly like the legitimate address, or looks similar to the genuine email address. The scammer will then request that staff transfer funds to them or make a payment to a third party on behalf of the business.”

It can take years to save a home deposit so it’s important to be safe when transferring funds.

HOW SCAMMERS GET YOUR DETAILS

Scammers use several methods to hack into the email addresses of businesses and ordinary Australians, says Fairley.

“Combining data from breaches, social media profiles and public records, criminals can create convincing phishing emails to trick the recipient into providing personal details – this could be over email, or through clicking on a link to a fraudulent website,” he says.

Phishing emails can even trick an unsuspecting victim into downloading malicious software which steals their personal information like account details.

“Another tactic used by criminals to break into email accounts is through weak or repeatedly used passwords,” he says. “Usernames and passwords leaked through data breaches can be acquired by cybercriminals, who try the same credentials across websites for other services – and a repeatedly used password will allow them to access other accounts instantly.”

AI is helping scammers get better in multiple ways.

WHY SCAMMERS ARE GETTING BETTER

Scamwatch’s spokeswoman says advances in technology are making it easier for scammers to “reach more people than ever before – and scams are becoming more sophisticated and harder for people to detect.”

Fairley says AI has played a big part in this.

Who knows what the future will bring?

“Criminals can leverage AI to impersonate real estate agents, solicitors or other parties involved in a property settlement,” he says. “This is done using AI-generated emails and documents that are deceptive yet appear highly convincing – making it harder for buyers and sellers to spot phishing attempts by scammers.

“With AI, criminals can also automate and scale the volume of phishing attempts, while reducing the time and resources required to create several variants of phishing messages and documents.”

With AI already being used by criminals across the globe to alter their voices and even conduct deepfake video calls, there’s no telling just how difficult it will be to discern fact from fiction in the future.

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