CASES of fraud in online rental property transactions are increasing globally, and customers and property owners alike should exercise caution, online listing service Lamudi Group said in a statement on Friday.
Lamudi cited the example of England, where police have reported a 44 percent increase in rental-related scams affecting 3,200 house hunters in the past year.
The England rental market–a real estate market that has been online for more than 20 years– has recorded more than 1 million cases of rental fraud since 2013, according to a survey by YouGov, an international internet-based market research firm.
Lamudi cofounder and managing director Paul Hermann noted that as the real estate market moved online, it has become easier for unscrupulous people to carry out rental scams.
“The property market going online made everything easier for everyone, and that includes fraudsters,” Hermann said.”
Online frauds usually involve phishing scam, wherein the con artist will gain access to a mail account of an agent or homeowner.
“In some unfortunate cases, a buyer will make a deposit, and the con artist will disappear leaving no trace,” Lamudi explained.
The phishing scam is carried by creating a fake inquiry on an online listing site.
“The inquiry template will have an outbound link that appears to send the advertiser back to their account but in reality, it will send the unsuspecting victim to a fake log-in prompt to retrieve information to phish,” Lamudi said.
This gives the scammer access to the advertiser’s email account, through which he can intercept new emails.
“Each scam will involve three victims: The phished advertiser, the second advertiser who acts as a pawn, and, of course, the potential renter or buyer,” the property listing site said.
Lamudi noted that overseas property renters and buyers are the most common victims of these online frauds, as they cannot travel to inspect the property.
To address the threat of online frauds, Lamudi said it has installed anti-phishing software that makes their website and email accounts impenetrable.
Hermann noted that having anti-phising software allows them to build the trust of their homebuyers.
“Realizing that fraud is a real issue, we ensured that our website has the latest anti-fraud technology and Rocket Internet, our parent company, provided the capital investment for us to get the best technology in the business,” Hermann said.
The Lamudi cofounder noted that providing security to their clients is a top priority of the company.
“For us, it was point one on our priority list, and our international property investors have responded favorably to the enhanced security we can offer them,” Hermann said.
Aside from online listing sites, Lamudi noted that financial institutions also play a part in mitigating the threat of online frauds.
“Nevertheless, the responsibility not only lies with online real estate platforms to counteract this fraud threat, but also with financial institutions who in some cases allow new users to create bank accounts online without due diligence,” Lamudi said.
Furthermore, Lamudi noted potential property buyers should also be educated on the issue of fraud in the online rental property market.
“What is clear is that a collaborative approach needs to be taken by all stakeholders to counter the problem, and that includes the education of end users on how to safely use online property sites,” Lamudi concluded.