Aussies are increasingly falling victim to settlement scams.
Homeowners and aspiring buyers have been warned to be vigilant following a rise in AI powered bank scams, which new research suggests nearly every Aussie would fail to detect.
Exchange platform PEXA revealed 97 per cent of Aussies who had bought property in the last year or intended to buy in the next failed to spot dangerous scam markers in property transaction emails.
These were the same red flags typically seen in settlement scams – where crooks hijack email accounts and impersonate real estate agents or solicitors in property transactions.
The PEXA data comes as the ACCC revealed the amount lost to property scams increased from $13 million in 2021 to $43.2 million in 2024.
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The scams capitalise on the sense of urgency that usually governs property transactions.
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Recent victims have included a Sydney couple who lost $970,000 in a settlement scam, while another buyer in Western Australia lost $732,000.
The typical settlement scam involves a hacker posing as the buyer’s solicitor or selling agent and providing them with new account details for the transfer of upfront buying costs like deposits.
Buyers fooled by the fake email will then deposit their funds – usually hundreds of thousands of dollars – into the scammers account.
One recent case reported to PEXA involved a single buyer, a retiree, who received an email that appeared to come from her conveyancer requesting the $800,000 she owed in a settlement transfer be paid two weeks ahead of schedule. Bank account details were changed.
The fraud was detected before money was transferred.
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PEXA tested survey respondents with this email.
PEXA’s research, which involved survey respondents being asked to spot red flags in a sample email, suggested most Aussies buyers would be fooled by settlement scams.
This was despite most people believing they could identify fraud attempts.
PEXA reported part of the reason Aussies were so susceptible to the scams was because the tactics had become more sophisticated.
AI technology means voice cloning of someone involved in the transfer process is possible, while creating highly convincing and personalised messages and emails has become easier.
PEXA chief information security officer Graham Fairley said settlement scams have become one of the most financially devastating forms of cybercrime in Australia.
“Property transactions involve large sums, short time frames and routine reliance on email – the exact conditions that cybercriminals exploit,” Mr Fairley said.
A recent scam saw a buyer cheated out of $970,000.
Scam measures can include emails demanding urgent payment with revised bank details and threatening forfeiture unless immediate deadlines are met.
Buyers are often busy, stressed and focused on the transaction outcome, so such changes can be easily overlooked.
Unlike a fraudulent credit card transaction, money lost to scammers in a property transaction can be more difficult to recoup, Mr Fairley added.
These scams are typically executed via business email compromise, he explained.
“(They) trick victims into sending large sums to the wrong bank by impersonating trusted parties in a transaction such as real estate agents, lawyers, or conveyancers.”
Original Grand Designs Australia host and renowned architect Peter Maddison, who is acting as PEXA’s Scam Awareness Ambassador, urged home buyers and sellers to stay vigilant.
Buyers are usually incredibly stressed during settlement periods and are often in little state to be mulling over small details. Scammers take advantage of this.
He recommended buyers use secure channels, double-check any unsolicited or urgent email instructions for payment and always verifying any payment details.
AI-POWERED SCAMS PICKING UP
Australian Banking Association CEO Simon Birmingham said the ever-increasing use of AI highlights the evolving and extreme lengths scammers are now deploying to steal your money.
“Unfortunately, we live in a world where advances in AI generated video and audio make it possible for criminals to impersonate celebrities, your friends, family members or even your bank,” Mr Birmingham said.
“From fake investment ads by celebrities to voice clones asking for help, AI scams are becoming more targeted, sophisticated and emotionally manipulative.
“While AI is a powerful tool for banks and law enforcement to combat scams, it has also become the new weapon of choice for scammers. AI scams sound real, look real, and feel real. That’s what makes them so dangerous.
“Banks will continue to fight back by using AI to detect and shut down scams so as to protect people’s money, however customer vigilance is still the best form of defence.”
Red flags for buyers and sellers to look out for include:
•Last minute change of bank details
•Urgency of payment demand
•Altered email addresses
•Unsolicited/unverified requests
•Confirmation of payee warnings
Parties involved in a property transaction are advised to:
•Always use secure communication platforms
•Never trust unsolicited email instructions for payments.
•Pay attention to Confirmation of Payee (CoP) warnings. Never ignore these warnings.
Tips to beat AI scams:
•Verify identities – be wary of familiar voices if they are coming from an unknown number. End the call and call them back on a known number.
•Consider pausing before responding to emotional or urgent calls – even if the voice seems familiar.
•Be wary of celebrity endorsements – if a famous face is pushing an investment, be sceptical.
•Never invest based on a video advertisement alone – research the platform or opportunity thoroughly before acting.
•Don’t trust emails or messages from your bank asking for personal information – banks will never ask you for PINs or passwords on email or text.
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