Aussie tradie loses $110,000 house deposit due to small detail: ‘My heart dropped'
Sydney tradie Louis May had been working 10-hour shifts, six days a week, as an electrician to save up a deposit for his first property in July last year. The 24-year-old had sorted out his finances and found an affordable apartment.
The apartment needed work, but he was 'very excited' about the prospect of moving out to his own place. Through the buying process, his lawyer had contacted him using two different email accounts.
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'So when I got an email from a third account, I didn't really think much of it. I had corresponded for a few days with the new third email address,' he told SBS Insight.
'I got sent a PEXA [Property Exchange Australia] form that instructed me to transfer money into a BSB and account number into an ANZ account.'
After speaking with his bank, Commonwealth Bank, May said he followed the instructions from the email and transferred $110,000 into the account. But on the morning of his property's settlement, he received a call from his lawyer advising him that the $110,000 wasn't in his account.
'When I said: 'I did what you had told me', and he said 'I'd never emailed you a PEXA form', my heart dropped,' he said.
'That was the moment that I realised I was scammed.'The consumer watchdog, the ACCC, said fake invoice scams, similar to the one May experienced, were 'hard to detect' because the scammer would either hack into the email system of the business or impersonate the business's email address by changing as little as one letter.
Australians reported losing $16.2 million to payment redirection scams in 2023. Despite the total number of reports to Scamwatch decreasing by 28 per cent, the total amount lost was up 3 per cent.
The ACCC said the most common industries targeted by the scam were those that regularly dealt with large transfers of money, such as real estate, legal and construction companies.
However, it has also received reports of car dealerships, travel companies, and their customers being targeted.
'If you receive an invoice via email, take the time to call the business on a number you have found yourself to confirm that the payment details are correct,' ACCC deputy chair Catriona Lowe has urged.
The Australian Financial Complaints Authority (AFCA) acts as the external dispute resolution scheme and helps resolve disputes with banks, insurers and super funds.
AFCA CEO David Locke said the law was 'inadequate' when it came to scams and the codes that apply were not designed to deal with the types of situations we are dealing with.
'There is a real need, and we have been calling for a long time, for legislation and regulations to better protect consumers in this space,' he told Insight.
Locke said he hopes the new framework legislation will lead banks to take further steps to protect consumers, such as confirmation of payee. This is designed to reduce scam losses by letting customers know when a payment recipient's name doesn't match up to other account details.
"Most people out there would never for a minute think that banks are not required to check the name that's given against the BSB and account number," he said.
May reported the scam to his bank but has been unable to recover his $110,000 deposit. He was offered a $1,000 remediation payment, which he did not accept.
May was able to purchase the apartment with the help of a loan from a family member. But he said he has no money left to fix up the place, and he is paying $600 more a month in interest as he had to take out a bigger mortgage.
'It's pretty heartbreaking. I feel like I'm further back than I was last year, even still now," he said.
"It's definitely taken a toll on me."
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