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Online property scams — what you need to know

12 June 2023

An Auckland property management company was unknowingly involved in a cunning online scam by someone who duplicated one of their listings from a listing portal.

The property management company had listed a property for rent through a listing portal, and a scammer used this as an opportunity to copy the images of the property and duplicate the listing by posting and promoting it from their own personal Facebook profile.

John* saw the listing on the scammer’s profile and responded on Facebook. The scammer, who claimed to be the landlord, obtained John’s details including his phone number, and then registered him to attend a Saturday viewing using the property management company’s online booking platform. John received an automated text – which noted it was from the property management company — outlining the date and time of the viewing.

After viewing the property with the legitimate property manager, John went back to the ‘landlord’/scammer and said he wanted to go ahead with applying to rent it. The scammer asked John to fill out an application form, which John did.

In an unusually short time frame, the scammer came back to John and informed him his application had been approved, provided him with a Tenancy Agreement and asked him to sign it, and to send over the money. Prior to this, the scammer had told John that they would offer the property to him for $500, whereas the property management company was asking for $600. John, of course, thought he was getting a bargain.

Sarah*, a spokesperson for the property management company, says this should sadly have been a red flag — as well as the fact the property was listed through a personal Facebook profile with no visible property history.

“It was super cunning the way the scammer registered this person to view the property through our company. We had no idea it wasn’t John himself registering, but the scammer. They registered the victim using their details, so John then received a text message from us,” Sarah says.

If it seems too good to be true, it probably is

John was in a hurry to move in and contacted the property management company on the Monday to arrange obtaining the keys — assuming that the ‘landlord’ would have told the property manager that they had withdrawn the property and let it to him. This was the point at which he discovered that he had been scammed.

The property management company was able to advise him to call his bank immediately to see if they could reverse the payment he had made to the so-called ‘landlord’.

“It had nothing to do with us, we didn’t have his money — all we could do was advise him to go to his bank in the hope they could reverse his payment,” said Sarah.

Fortunately, the bank was able to reverse the payment successfully — but with weekend processing now in place, if even one more day had passed, this might not have been possible.

So, what can property seekers and property companies learn from this?

Sarah says that the property management company has instructed its team to tell every prospective client that the property is only listed with their company, and if anybody is trying to engage with them about a property in any way other than through their website or their listing portal, it is illegitimate and a scam.

“For people seeking property and dealing with a property management company, ask to see property managers’ business cards to make sure they are who they say they are. When you make a payment, you should only ever be paying money to a trust account. Most property management companies are listed as a bill payee with the banks; independently check that the bank account number you’ve been given matches the one in the bank bill payment system,” she said. 

“If you’re dealing with a private landlord, check the Council rates website to ensure that the person you are dealing with is actually the owner of the property,” adds Sarah.

“The most disappointing part of this experience is that these scammers are preying on vulnerable and desperate people — people who really need to find somewhere to live — and people who can at least afford to lose up to five weeks rent and bond. It’s a colossal amount of money to lose for most people,” she says.

Sarah also advises consumers to do a ‘sniff test’ on everything they see in a property listing advert. Analyse the advertising history of the advertiser — have they suddenly become active after a while of being dormant? Have they ever advertised property previously? If not, what’s their connection to the property? Do they have one company name? If not, how did they suddenly get a hold of a different company’s listing? Finally, is the property listed with anyone else? That in itself would be unusual.

What more can be done to safe guard? Top tips from Cyber Security Awareness Training Experts, Phriendly Phishing

Verify the identity of the property manager or owner: Be cautious of people claiming to be property managers or landlords on social media. These platforms can make it easy for scammers to impersonate legitimate entities. If you are searching for property on social media, it's a good idea to independently look up the official contact information for the property management company they claim to represent and contact them through that official channel to verify their identity. Never rely solely on the contact information provided by the person on social media.

Official channels of communication: Where possible, use official property listing websites, property management company websites, or official office numbers to make enquiries or schedule viewings. Communicating or closing deals through social media platforms or personal email addresses can be a red flag for potential scams.

Beware of unusually low rent prices: If the rental price seems too good to be true, it probably is. Scammers often lure victims in with incredible deals. Do some research on what a typical rental price should be in the local market. If you see the same property advertised with two different prices, take a closer look at whose listing it really is.

Do not pay money upfront: This includes security deposits, rent, or other fees. If you are emailed a link to pay your deposit, make sure you scan for S.C.A.M — Scrutinise the sender, content, action needed and then manage the situation once you have ascertained it’s legitimate or report if it’s a scam.

Ensure legal documents are provided: Make sure all agreements are in writing and understand all terms and conditions before signing. A legitimate landlord or property manager should provide a proper lease agreement. Be suspicious if they're reluctant or refuse to do so. Again, don’t open any attachments or links in email communications, and insist on an in-person meeting to sign a lease.

*name changed for privacy