Australians lose $300,000 in rental scams during COVID

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on September 21, 2020
Australians lose $300,000 in rental scams during COVID

Photo by Alex Block on Unsplash

Australians have lost over $300,000 to rental and accommodation scams this year, with many scammers using tactics related to COVID-19.

The Australian Competition and Consumer Commission's (ACCC) Scamwatch has received 560 reports of rental scams so far this year, a 56% increase as scammers target people looking for a rental property during COVID by offering fake properties.

“Scammers are offering reduced rents due to COVID-19 and using the government restrictions to trick people into transferring money without inspecting the property,” ACCC Deputy Commissioner Delia Rickard said.

According to the ACCC, the scammers will post ads on real estate listing websites or target people who have posted on social media platforms that they are looking for a room to rent.

After the victim responds, the scammer requests an upfront deposit be paid to secure the property or phish for personal information through a 'tenant application form' and promise to hand over the keys once the payment or information has been provided.

The scammer may even come up with excuses for further payments to be made, before cutting off contact. 

Some scammers are even impersonating real estate agents and organising fake inspections. The victim only realises they have been scammed when they arrive to the 'inspection' to discover the property doesn't exist or is currently occupied.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender

Variable
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UNLIMITED REDRAWSSPECIAL OFFER
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

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  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
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NSW/VIC/SA METRO & INNER REGIONAL AREAS
NSW/VIC/SA METRO & INNER REGIONAL AREAS

Variable Home Loan (Principal and Interest)

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Variable
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REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
NO ONGOING FEESFREE REDRAW FACILITY
  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
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Live-in Variable Loan (Principal and Interest) (LVR < 90%)

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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 28, 2022. View disclaimer.

According to the ACCC, Australians aged between 25-34 reported the most rental scams in 2020, with most scams in NSW, VIC and the ACT.

A common rental scam currently making its way around Canberra involves a scammer impersonating a doctor living in Sweden who only offers virtual inspections before requesting bond money.

How to avoid being scammed

Ms Rickard said renters should always view a property in person before handing over bond money and ensure they're dealing with a licensed real estate agent.

“In areas of Victoria under COVID-19 level 4 restrictions this is not possible, but you can help protect yourself by doing an online search to confirm the property exists and, if dealing with an agent, checking that the agent you are dealing with is licensed," Rickard said.

“Scammers often rely on email communications to avoid identification, do an independent search for a phone number and speak to the property manager over the phone or arrange a meeting in person.

“Before making any payments ensure you are dealing with the licensed agent, if a scammer has your details they may impersonate a real estate agent and attempt to ‘follow-up’ requesting money after an inspection.”

With so many Australians under financial stress due to the COVID-19 crisis, falling victim to a rental scam can be financially crippling.

“Once a scammer has your personal information you are at risk of being targeted by further scams or identity theft," Rickard said.

“Many people are also experiencing financial difficulties due to the pandemic and the financial impact of falling victim to a scam can be devastating."


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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