Most Australians fail to spot property scam signs in emails

Recent research by PEXA has found that 97% of Australians who have bought a property in the last year, or intend to do so in the next 12 months, were unable to recognise warning signs of property scam attempts in transaction emails, despite most participants believing they are capable of identifying fraudulent activity.

The survey, which sought responses from individuals who had recently participated in property transactions or plan to in the near future, comes alongside the release of PEXA's White Paper titled Safeguarding your Property Settlement: Awareness and Prevention of Scams. This paper has been authored by Graham Fairley, Chief Information Security Officer at PEXA, and highlights the financial risks that home buyers and sellers increasingly face from cyber-related settlement scams.

Scam tactics

Fairley highlights that property settlements present attractive conditions for cybercriminals due to the significant funds involved, short timelines, and heavy reliance on email communications during the process. He explained, "Property transactions involve large sums, short time frames and routine reliance on email – the exact conditions that cybercriminals exploit."

"Criminals know they don't need to compromise systems – they just need to compromise trust. And these scams, typically executed via business email compromise, are using increasingly sophisticated measures to trick victims into sending large sums to the wrong bank by impersonating trusted parties in a transaction such as real estate agents, lawyers, or conveyancers."

Cybercriminals often use subtle tactics such as minor changes to email addresses, unexpected changes in bank details, messages demanding urgent payments, or threats of transaction forfeiture if deadlines are not met. Such changes can be easily missed by buyers and sellers who are often under pressure and focused on completing the transaction.

Fairley pointed out that recovering funds lost to such property scams is considerably harder than disputing a credit card charge. "Unlike a fraudulent credit card transaction, money lost to scammers in a property transaction can be much more difficult to recoup," he said.

Despite the risks, the White Paper also suggests that improving awareness and adopting secure technological solutions can significantly reduce exposure to scams. "The good news is increased awareness and smart use of technology such as secure settlement tools can help people reduce the risk of falling victim to scammers," Fairley said.

Industry response

Architect and host of Grand Designs Australia, Peter Maddison, has joined PEXA's efforts against property settlement scams in his role as Scam Awareness Ambassador. He stressed the importance of vigilance throughout the transaction process and the need for clarity and caution among buyers and sellers.

"As someone who's spent decades in property and architecture, I find these results deeply concerning," said Maddison. "Property transactions are often the biggest financial decisions in people's lives. When scammers strike during these critical moments, the consequences can be devastating. I'm partnering with PEXA to help Australians understand how they can protect their property dreams from these sophisticated scams."

Maddison encourages home buyers and sellers to adhere closely to recommended security practices, including always using trusted channels for communication, double-checking any unanticipated or urgent instructions regarding payments, and verifying all bank details independently before sending funds.

Key warning signs

PEXA's recommendations urge particular vigilance for the following red flags in the transaction process:

• Last minute changes to bank details
• Urgent demands for payment
• Altered or unfamiliar email addresses
• Unsolicited or unverified requests for information
• Any warnings from confirmation of payee services

Mitigation steps

The White Paper advises all parties in a property transaction to use secure communication platforms, such as dedicated settlement applications, to safely exchange sensitive banking information. It also stresses the importance of never following payment instructions from unsolicited emails and always scrutinising confirmation of payee notices. Checking communication details for inconsistencies and promptly investigating any anomalies can act as critical safeguards.

The nationwide survey on which the findings are based canvassed over 1,000 Australians involved in recent or upcoming property transactions, pointing to a widespread overestimation of the public's confidence in spotting sophisticated online fraud efforts.