When times are tough, dig­i­tal fraud in­creases, putting buy­ers and sell­ers at greater risk

Weekend Argus (Saturday Edition) - - PROPERTY -

PROP­ERTY fraud is on the rise and buy­ers and sell­ers should be ex­tra vig­i­lant, says Chris Tyson, CEO of Tyson Prop­er­ties.

“In tough eco­nomic times, peo­ple turn to crime,” he says.

There are dif­fer­ent types of prop­erty fraud tak­ing place. A prop­erty owner want­ing to sell his prop­erty may learn an im­poster ob­tained his sig­na­ture for what he thought was a bank loan, only to find out that the im­poster sold his prop­erty to a third party.

Then there’s the prob­lem of pur­chasers fal­si­fy­ing doc­u­ments such as pay slips to se­cure bond ap­provals. When this is un­cov­ered and a bond ap­proval is re­tracted, the sale falls through.

In such in­stances, costs in­curred by sell­ers, es­tate agents and con­veyancers re­main un­set­tled.

The fastest-grow­ing prop­erty fraud is dig­i­tal, says Tyson.

Tim Akin­nusi, ex­ec­u­tive head: sales and client man­age­ment in home loans at Ned­bank, says prop­erty fraud is a real threat. One of the most com­mon is hack­ing into emails or redi­rect­ing funds to new ben­e­fi­ciary ac­counts.

Dar­ren Bran­der, a di­rec­tor and con­veyancer at na­tional law firm Smith Ta­bata Buchanan Boyes, agrees it is be­com­ing in­creas­ingly com­mon for fraud­sters to in­ter- cept or sim­u­late com­mu­ni­ca­tions be­tween their clients or be­tween at­tor­neys and their clients in prop­erty- trans­fer trans­ac­tions.

He be­lieves prop­erty- re­lated fraud has in­creased over the past three years be­cause de­posits paid on prop­erty trans­ac­tions and the pro­ceeds of a sale rep­re­sent sig­nif­i­cant amounts of money.

“Of­ten buy­ers are re­quested to pay the de­posit on a prop­erty trans­ac­tion into an at­tor­ney’s trust ac­count or into the agent’s trust ac­count just af­ter ac­cep­tance of an of­fer.

“Fraud­sters have found ways to in­ter­cept these re­quests and use the de­tails to cre­ate al­ter­na­tive emails which look like those sent by agents or at­tor­neys. These ad­vise the client of a change in bank­ing de­tails.”

Clients are then asked to pay the de­posit into the “new” bank­ing ac­count.

He says fraud­sters seem to be aware when prop­erty trans­ac­tions are about to be reg­is­tered.

“The same modus operandi seems to be ap­plied with re­gard to the com­mu­ni­ca­tion be­tween the at­tor­ney and the client when arranging pay­ment of the pur­chase price to the seller, af­ter reg­is­tra­tion. It is dur­ing this pe­riod that sell­ers, buy­ers, agents and at­tor­neys must be most vig­i­lant,” he warns.

Bran­der sug­gests buy­ers should be viewed with sus­pi­cion.

All re­quests made via email should be checked against pre­vi­ous mails re­ceived from the same sup­posed sen­der. Fraud­u­lent mails are of­ten sent from ac­counts that are sim­i­lar but never iden­ti­cal to the orig­i­nal email ad­dresses.

Bran­der ac­knowl­edges that face-to-face meet­ings are not al­ways prac­ti­cal. How­ever, he says im­por­tant doc­u­ments should at all times be signed in per­son, and ver­i­fi­ca­tion of bank de­tails must al­ways be com­pleted.

“We reg­u­larly ad­vise clients that we never send an email re­quest­ing a change of bank­ing de­tails,” he says.

Akin­nusi says banks are also urg­ing clients to never dis­close ma­te­rial in­for­ma­tion on­line.

“As much as pos­si­ble, share crit­i­cal in­for­ma­tion in per­son only,” he says.

He says that, even in per­son, clients should make sure an of­fer to pur­chase is com­pre­hen­sive and all crit­i­cal in­for­ma­tion is in­cluded, es­pe­cially all de­tails of buyer and seller and the ad­dress of the prop­erty.

Tyson says the risk of fraud is not con­fined to home loans.

“Cash deals, no mat­ter how en­tic­ing, can also pose great risks. Al­ways in­sist on a de­posit prior to oc­cu­pa­tion.”

Bran­der con­curs: “An un­wit­ting seller may be­lieve the cash deal to be se­cure, but he is in an un­en­vi­ous po­si­tion if the pur­chaser in­sists on only part­ing with his cash af­ter trans­fer into the pur­chaser’s name is ef­fected. The seller then risks not be­ing paid at all, af­ter al­low­ing own­er­ship to pass.”

Akin­nusi ad­vises both buy­ers and sell­ers to use only reg­is­tered and rep­utable es­tate agents and ap­proved con­veyancers.

“Choose an es­tate agent af­fil­i­ated to a reg­is­tered brand and ask ques­tions about their af­fil­i­a­tions, reg­is­tra­tions and qual­i­fi­ca­tions. Ask to see proof of cer­ti­fi­ca­tions, VAT num­bers and tax reg­is­tra­tions.”

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