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.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
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."
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
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.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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