Navigating the pitfalls of property fraud in Australia
Imagine purchasing a home, only to find out that the previous owner never actually put that property up for sale. This is what’s known as property fraud or property title fraud, and with real estate scams on the rise in Australia it’s important for home buyers and sellers to be aware of the risks.
So, what is property fraud – and more importantly, what can you do about it?
The link between identity theft and property fraud
In a case of property fraud a scammer takes on the identity of a genuine home owner, often via emails or documents, and begins the home selling process as if they were that owner. If the sale goes through the scammers can rapidly disappear with the proceeds – leaving both the original owner and the new buyer expecting to claim what they believe is their rightful property.
In 2014, scammers sold an investment property in Canberra without the owner’s knowledge while she was living outside Australia. And WA has seen two successful property sales and six attempts to fraudulently sell properties.
Sometimes a new home owner’s interest in their property might be threatened in a different way, as in this recent case:
In 2023, a court ruling found that a couple never actually owned the Queensland home they’d paid $1.265 million for and lived in for five years. What they hadn’t known upon purchasing the property was that the previous owner had claimed her relative had fraudulently mortgaged her property as security for a loan.
While this is an unusual case, it also left the couple fighting to be able to own the property they thought was theirs.
How property fraud can affect ordinary Aussies
Property agents must have sufficient controls in place to prevent fraud, and there are improved title registration procedures in place, but identity theft can still happen.
It’s no surprise that property fraud can be financially and emotionally devastating if you’re unfortunate enough to be caught up in it. Being on either the owning or buying end of property fraud can be a stressful, confusing time. Who could you turn to for good legal advice?
What could you do if your property interests were in doubt?
Here’s where you could turn to your title insurance provider for assistance, if you have cover. With a successful claim First Title may be able to assist a policy holder with specialist legal advice and the support to defend their interests in the property.
Title insurance can provide cover for:
- Fraud forgery that might result in your land being sold to another owner
- Defective registration of a document affecting your interest or rights to your property
- A range of other home ownership risks, including illegal structures and boundary issues.
Title insurance is an affordable, one-off cost that could help protect your property interests if you’re ever unlucky enough to be affected by property fraud.
How else can you minimise the risks of property fraud?
The recent Optus, Medibank and Latitude data breaches have seen millions of Australians vulnerable to identity theft, and keeping safe is front of mind for many. There’s benefit in all of us taking some measures to reduce the risk of identity theft and fraud. For example, you can:
- Verify the spelling of email addresses and websites
- Check directly with the property agent if you feel something isn't right
- Maintain strong passwords and use two-factor authentication
- Consider placing a caveat on your property if necessary.
These measures could also help to minimise the risk of mortgage fraud as well as property title fraud.
Interested in title fraud protection? Contact us today
Australians insure against a range of property ownership risks already, from fire to flood. It’s also easy to request cover for a range of property ownership risks with title insurance.
Title insurance costs less than you might expect with a single premium, and this type of cover does not expire for the entire time you own your property. Learn more about what title insurance is, get a quick quote, or join our monthly email list for more property ownership tips in your inbox.
