From fake rental listings and phishing scams to identity theft and fraudulent property schemes, cybercriminals are increasingly targeting South Africa's property market. Jackie Smith, CEO of Buyers Trust, explains the five biggest scams affecting buyers and tenants today and why secure, bank-hosted deposit protection is becoming an essential safeguard in property transactions.
Over the past two decades, internet sites have replaced newspaper classifieds and estate agency window advertisements as the most popular way to buy and rent property in South Africa.
While this has made it easier for buyers and tenants to find their dream home, it has also created new opportunities for increasingly sophisticated fraudsters, explains Jackie Smith, CEO of Buyers Trust, South Africa's leading bank-hosted property deposit platform. Having safeguarded more than R2 billion in property deposits with zero recorded cybercrime incidents, Buyers Trust is best placed to support homebuyers in today’s high-risk environment.
"Property transactions involve large sums of money, multiple parties and highly sensitive personal information, making them an attractive target for scammers," says Smith. "We've seen fraud evolve dramatically over the past few years, with criminals becoming more sophisticated in the way they exploit trust and pressure buyers into making quick decisions."
These scams often involve fraudsters posing as legitimate property owners, estate agents or service providers and using online platforms to advertise properties that do not exist or are not available to rent or purchase.
Smith emphasises that while the anonymity of the internet has made it easier to facilitate these scams, some fraudsters will go so far as to meet unsuspecting buyers and renters in person to appear legitimate, only to disappear once funds have been transferred.
Smith shares five popular property scams to watch out for:
1) Fake rental listings and agents
"In this instance, fraudsters advertise a rental property online, often at a very attractive rate, and wait for a prospective tenant to make contact. They make excuses for why the property cannot be viewed in person but emphasise that there is strong demand and pressure the tenant to pay a deposit or application fee to secure the property."
Once payment is made, the listing disappears and so does the scammer.
"This may sound far-fetched, but in highly competitive rental markets such as Cape Town, some tenants are willing to take shortcuts to secure accommodation," says Smith. "No legitimate property transaction should rely solely on urgency or pressure. Buyers and tenants should always ensure funds are only transferred through secure, verifiable channels."
2) Phishing scams
In this increasingly common form of cybercrime, fraudsters intercept emails between buyers, sellers, estate agents and conveyancing attorneys before posing as a legitimate party to divert deposits into fraudulent bank accounts.
"As a company that specialises in safeguarding property deposits, we've seen how devastating these scams can be," says Smith. "Even digitally-savvy buyers have lost substantial amounts of money after receiving what appeared to be legitimate payment instructions."
Smith cites a prominent case where law firm ENS Africa was ordered to pay R5.5 million to a client who fell victim to a phishing attack after using the firm's trust account for her property deposit.
"The safest approach is to remove opportunities for criminals to alter banking details altogether," she explains. "Using a secure, bank-hosted deposit platform that independently holds the funds and provides complete transparency and a bank guarantee significantly reduces the risk of payment diversion fraud."
3) Government housing assistance scams
This scam particularly targets lower-income individuals seeking government-assisted housing. Fraudsters promise to move applicants up housing waiting lists or secure subsidies faster in exchange for payment.
"Scammers often produce convincing-looking documentation and correspondence to create the impression of legitimacy," says Smith. "Consumers should remember that no payment is required when applying for a government housing subsidy or First Home Finance (FHF) assistance."
4) Identity theft scams
This sophisticated scam targets unsuspecting homeowners. Criminals obtain personal information and use it to create fraudulent documentation that enables them to transfer ownership of a property into their own name.
"Once the transfer is complete, the fraudster may approach a financial institution and take out a bond against the property before disappearing with the funds," explains Smith.
The increasing prevalence of identity fraud highlights the importance of protecting personal information throughout the property transaction process and only sharing documentation through trusted, secure channels.
5) Timeshare scams
This scenario involves fraudulent sales agents marketing timeshares in non-existent luxury developments or properties that are not actually available for sale.
"These scams often target overseas buyers or individuals purchasing holiday properties who may not be able to physically inspect the property," says Smith. "Fraudsters typically use glossy marketing material, unrealistic discounts and high-pressure sales tactics to create urgency."
Avoiding Scams
Smith believes that the two golden rules when it comes to avoiding property scams are protecting your personal information and being extremely cautious when transferring money.
"Always verify the identity of the people you're dealing with, independently confirm banking details and never allow yourself to be pressured into making immediate payments," she says.
For homebuyers, Smith also recommends carefully considering where deposits are held during the transaction process. "Many buyers assume they have no choice but to transfer large sums of money into a third-party account. However, secure alternatives exist that provide greater transparency, bank-level security and protection against both cybercrime and misappropriation of funds."
She notes that platforms such as Buyers Trust allow deposits to be held securely in a dedicated bank-hosted facility until all transaction conditions have been met, providing buyers with visibility over their funds throughout the process while eliminating many of the risks associated with manual transfers.
"Your property purchase will likely be one of the biggest financial commitments of your life," concludes Smith. "Taking a little extra time to verify information, protect your personal data and ensure your deposit is held securely can make all the difference."
