Scam Alert

This updated advisory has just come through from the Settlement Agents’ Supervisory Board and is a timely warning for both real estate and settlement agents.

Recent events have prompted a further scam alert being issued by the Chairwoman of the Settlement Agents Supervisory Board (the Board), Ms Mirina Muir.

Ms Muir advised that following on from the previous alert issued on 10 September 2010, the Board has been advised of another email scam that appears to be targeting real estate agents. The sender of the email, who claims to be based overseas but the owner of a property in Perth, states that they are presently renting out the property but are looking to sell it. It is unclear if the email is generic and being sent to several real estate agents or if it is targeting particular agencies.

In this instance the agent who was targeted with this scam did not have any connection to the property other than being the local agent. Additionally, this agent knew of the rightful owners who were in occupation of the subject property, made them aware of this attempted scam and then contacted the Real Estate and Business Agents Supervisory Board (REBA). REBA has recommended to the agent that this matter be reported to the Major Fraud Squad of the WA Police.

In light of this case and the recent scam which saw a property sold in Perth without the owner’s knowledge (as documented in the e-Bulletin published on 10 September 2010), the Chairwoman would like to remind agents of the steps they can take to ensure the risks are minimised in such circumstances.

When dealing with an absentee seller, it is imperative that extra checks are carried out to ensure that you are corresponding with the rightful owner of the property.

In cases where the supposed absentee owner has made contact from a different email address than that on record with the agency stating that they have changed contact details, it is wise practice to confirm these changes by responding to both the current and new addresses seeking confirmation that the change is authorised. The same applies to telephone numbers and postal details.

It is also recommended that 100 points of identification is also received, but agents must still be cautious as forged documents can and may be used.

Agents should request a driver’s licence or passport with a photograph and signature, as well as independent proof of address from an employer or local council. Additionally, signatures received should be compared with others on record; while there may be superficial changes, they should be fundamentally the same.

Ms Muir said that often the settlement agent is considered to be the last line of defence against inappropriate property transfers.

“We would encourage all settlement agents who are currently, or will be in the future, dealing with absentee owners to be ever vigilant and double check the validity of documents that have originated overseas,” Ms Muir said.

Other characteristics that should alert agents to the possibility of a scam include a poor command of English in written correspondence and an urgency to sell the property.

It is also prudent to ask questions of the seller that only the real owner would know the answers to, therefore eliciting information about the property rather than feeding the scammers information that they may use to add credibility to their story.

Agents could also consider asking for certain settlement fees up front, as scammers will most likely be discouraged from pursuing the sale or will make up excuses as to why they can’t pay them.

The onus, however, is on the agent to exercise due diligence in these situations and to be extra vigilant.

It is imperative that agents adequately manage the risks involved in these sales, and, ultimately, if there is any doubt, they should report their suspicions to the proper authorities and not proceed with the transaction.