- Being approached by telemarketers
It is very cheap for scammers to use telemarketers and is all about the numbers game. They might make 100 calls for two leads, but this can still be worth a lot of money. Reputable property sellers will never use telemarketing. The same applies for letterbox drops.
- Shopping centre competitions
Prize draws to win plasma televisions or other goods in shopping centres are often just a way to get your details so scammers can call you and find out how much equity you have in your family home.
- One stop shops
If a company claims it can take care of all the facets of your investment, including mortgage broking, valuations, legal representation and financing, it is probably a scam. All these so-called ‘independent’ professionals are probably aware of what is happening and are in on the rort. They have everything ready so they can sign you up before you have enough time to reconsider.
- Unrealistic promises
Any advertising promising ‘risk free investments’ or that you will ‘be a millionaire in three years’ are usually scams. Likewise if you are promised high returns at little to no risk, or offered a loan to cover the cost of the investment and further seminars.
- They want to fly you interstate
Some scammers will fly you to view a property in another state. They are hopeful that you will not know what the real values of properties in those areas are and will also use the fact that they have covered the expenses to make you feel obliged to give them something back.
- The online face of the business
Company websites are usually a giveaway. If you go to a site and find that the company has been set up within the last few years, you should be suspicious. They might claim to have been ‘in business’ for 25 years, but this could mean in any field. You will also find ‘happy customer’ testimonials on the site. These usually just give first names and states, so you have no idea if the people even exist.
Two golden rules
Before investing in property, you should always seek:
- An independent valuation of the property you are about to purchase. Never be satisfied with the property marketer’s valuation, it is probably made up. An independent valuation may cost a few hundred dollars, but at least you know you are going in with your eyes open
- Independent legal advice. Property marketers will provide their own lawyers, but the lawyers are getting a big slice of the profits. Some of them are happy to lead people astray and pretend they do not know what is going on
Who can you call?
The federal government set up Scamwatch a few years back to provide information and warnings about potential scams and give you a place to report suspicious activity. You can report a scam online at scamwatch.com.au or by calling the ACCC info centre on 1300 795 995.
You can also report scams to the following organisations:
- The Australian Securities and Investments Commission (ASIC) - for financial and investment scams
- The Australian Taxation Office (ATO) – for tax-related scams, including if you have provided the scammer your tax file number
- Your bank or financial institution – for banking and credit card scams
- The Australian Communications and Media Authority – for spam emails
- The police – for fraud and theft crimes
Local consumer protection agencies
The ACCC is the only national agency dealing with consumer protection, but the states and territories have their own important agencies:
- ACT Office of Regulatory Services – (02) 6207 3000
- Consumer Affairs Victoria – 1300 55 81 81
- NSW Fair Trading – 13 32 20
- NT Consumer Affairs – 1800 019 319
- Qld Office of Fair Trading – 13 74 68
- SA Office of Consumer and Business Affairs – 13 18 82
- Tasmania Consumer Affairs and Fair Trading – 1300 65 44 99
- WA Department of Commerce – Consumer Protection – 1300 30 40 54