Property Talk

Are you too smart to get scammed

Are you too smart to fall for a real estate scam In the US the FBI publish reports on real estate and rental Internet crimes. The most recent report shows 11,300 victims in 2018 cost them US$150m which represents a dramatic three-fold increase.

What happens in the US quickly spreads to the rest of the world and South Africa will be no exception. We already have our share of similar fraudsters ready and willing to take advantage of unsuspecting realtors, property owners or conveyancing attorneys.

The rental market is a favourite playground for these thieves. When you have been in business for 25 years as I have been you tend to have had exposure to almost every trick in the book and learn to recognize the giveaway signs of pending danger.

Long-term tenants set on committing fraud are very persuasive and use advanced psychological techniques to gain the Agent and Landlord's confidence.

They have well organized and presented documentation and go out of their way to create a perceived profile of a tenant that would be regarded as low risk. Examples of these would include a family with children or a German couple with business interests in the country.

One technique used is that they orchestrate an introduction or referral from somebody regarded as trustworthy, such as the Chairman of a home-owners association or sectional title body corporate. Oh Yes, believe me they can be very devious!

The modus-operandi of these tenants is to get occupation of a high-end property with little to no money down and then to use the system to their advantage to draw out their "free" occupation of the property.

Warning to Landlords: These types actively seek out direct rentals by the Landlord to escape the scrutiny of a vigilant estate agent. The holiday rental fraudsters are rife along our popular Dolphin Coast and especially during peak periods in the hotspots such as Zimbali.

They typically steal an existing estate agents' images online, duplicate a listing on portals such as Gumtree that have little to no checks and balances to protect the public, and use a gmail address and cell number as their contact details.

Their game plan is to use the bait of a very low rental on a good-looking property at a peak period to solicit a deposit payment. As soon as this is done, the money is immediately moved into different accounts and the gmail address and cell number vanish. Believe it or not this happens every year in Zimbali.

One year I even set up a sting operation and we managed through the clever and quick action of the Nedbank fraud unit to freeze the fraudster's bank account. How they open these bank accounts in the first place is a mystery, but where there is a will there is a way.

The serious fraud in real estate happens during the conveyancing process where fraudsters hack email accounts and with incredible patience monitor email communication between the parties, waiting for the instructions by one to transfer money into a bank account.

This is when they act, intercept the communication and amend the banking details so that the unsuspecting buyer transfers funds to an incorrect account. This money immediately disappears. One way to protect against this fraud is to always check banking details telephonically prior to making the transfer.