It may seem awkward to request credentials from estate agents before handing over a deposit. However, with rental fraud on the rise, failing to do so may leave you vulnerable to scams.
We consider how you can avoid becoming a victim of this increasingly-prevalent crime.
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What is rental fraud?
Rental fraud occurs when prospective tenants are conned into paying a deposit or first month’s rent towards a property that either doesn’t exist, or isn’t really on the market.
Lorraine-Marie Dellbridge, rentals manager for Lew Geffen Sotheby’s International Realty in the Southern Suburbs, Noordhoek and False Bay, explains that the two most common scams are as follows.
- The fraudster markets a property that they don't actually own but do have access to. They sign multiple leases and simply vanish with the deposits.
- The fraudster gets interested parties to pay upfront before actually viewing the property. In this case the property either doesn't exist, or stolen pictures are used to create an advert. They perpetrate this scam by maintaining that if you aren’t willing to pay a deposit, you are not really interested.
Grahame Diedericks, manager principal in Midrand for Lew Geffen Sotheby’s International Realty, notes in a press release that rental fraud has become far more prevalent over the years.
“The spike in digital fraud has prompted financial institutions to urge clients and property professionals to keep their eyes open for any irregularities and ensure they verify all credentials,” he says.
In the same press release, Eduan Milner, from Eduan Milner Attorneys, Notaries, and Conveyancers, explains that this increase has been so significant that the Attorneys Indemnity Insurance Fund no longer covers attorneys who fall victim to cybercrime as a result of digital communication with estate agents.
READ MORE: How to identify an investment scam
How to protect yourself
Dellbridge says that your first line of defence is to use a reputable agency because they vet landlords thoroughly.
“However, if you are considering renting a property directly from the landlord, my advice would be that if you have any doubt at all, don’t do it.”.
She adds that you should never take a property without viewing it, and never transfer money to secure a property unless you are completely sure the agent or landlord is authentic.
“You can also insist that an attorney holds the funds in their account until a pre-occupation inspection is done.
“If there are current tenants in residence when you view the property, be sure to ask them questions, and don’t come across as desperate because dishonest people skilfully prey on that,” she cautions.
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