This week is Scam Awareness Week in Australia run by the ACCC and ScamWatch. And it couldn’t come at a better time. Throughout Australia presently there are hundreds if not thousands of different scams operating aimed at parting you from your money or valuable identity documents.
If you are thinking about, or have recently applied for a home loan, we wanted to share some ways to protect yourself from scams.
Secure your ID and important documents
It’s important that you are very careful who you share your ID documents with. It’s a requirement of Australian lenders that you provide ID when you apply for a home loan, but be very careful how you share this information with the lender or your broker.
It’s not recommended that you simply email it across. Many brokers use secure file servers for you to share your important documents via. Entourage in particular use a secure file storage facility that provides enterprise grade security, encrypts your data, is password protected and is subject to regular strict third-party testing.
Protecting your deposit
When you’ve been saving a home loan deposit for you need to be careful to protect your nest egg. Sometimes this can be hundreds of thousands of dollars saved over years and it would be devastating to lose some or all of this to scammers.
The government offers a guarantee of $250,000 per person per institution, which means if your bank goes bankrupt or something unforeseen happens, the Australian government guarantee your money will be paid back to you. If you have more than $250,000 (as is often the case when buying property) then it would be wise to have these funds spread across multiple ADI’s.
Finally, when it comes time to transfer the deposit for the property purchase, triple check how the funds are to be paid. If you are doing an electronic bank transfer, don’t just pay the funds to an account provide via email, actually call the company and verify the bank details verbally too.
It’s come to light recently that some computer programs are being compromised, banking details changed with the scammers details put on instead. Clients then pay these invoices believing the funds are going to the right place, when in fact they are not and unfortunately losing large sums of money.
These types of scams are very sophisticated and difficult to spot so it pays to be diligent when it comes to large sums of money that will be almost impossible to get back.
Loan scams
We help our clients take out loans all day, every day. Obtaining a home loan in Australia can be a challenge, certainly there are myriad documents, credit checks and processes that occur.
If you are contacted by someone about a loan that you have not enquired about, chances are it could be a scam. Banks and lenders do a lot of advertising and some will even do mail outs or email campaigns, so it can be hard to tell what’s real and what’s fake. Here are some things to look for:
- The sender of the email – click the drop down and check where the email was sent from. It might say CommBank in the name but the actual address won’t be from an cba.com.au account. If it’s an account from a free email provider like Live or Gmail then it’s not from a legitimate lender or bank
- If it has a ridiculously low interest rate or even an interest free period. Interest rates are very low right now so it might be hard to tell, but a lender legally has to provide things like a comparison rate, details on fees and charges, loan term, LVR’s and muc more. If these things are missing from the information then be careful.
- If there is no credit check or they are offering guaranteed approval then it could be a scam.
- A lender or broker in Australia must be licenced to offer credit to you. This means they have to have an Australian Credit Licence or be an authorised representative. There is a register which ASIC maintain you can check to see whether the person or company you are dealing with is licenced, click here: https://connectonline.asic.gov.au/RegistrySearch/faces/landing/ProfessionalRegisters.jspx?_adf.ctrl-state=kxbboj899_4
Here are some top tips from the Australian Banking Association on protecting yourself from scams:
- Never share passwords and personal information.
- Anyone asking for a password is probably a scammer.
- Be a sceptic when reading email attachments, links and texts. When in doubt, delete.
- Scammers target everyone, and they sound genuine.
- Use up-to-date anti-virus software to protect your computer.
- Don’t send money or personal information to people from unusual locations.
Be alert, not alarmed
Scams occur constantly and in so many different ways, it’s safe to say at some stage you are going to come across one. Hopefully, following some of these tips and knowing what scams are currently running – you will avoid falling victim to them.