Building trust: Consumer protection agency warns consumers of ‘home con’ scams
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In the age of digital convenience, where services are just a click away, South Australian homeowners are being urged to exercise caution following a spate of 'insidious' construction scams.
The state's consumer protection agency has sounded the alarm, warning that unsuspecting consumers have been conned out of tens of thousands of dollars through online work-for-hire platforms and digital marketplaces.
The scam operates by exploiting the trust of individuals looking to hire builders for residential work.
Scammers, posing as legitimate, licensed builders, had been responding to job posts on various websites, using business names and email addresses that closely mimic those of genuine businesses operating within South Australia.
These fraudsters are sophisticated and knowledgeable; they engage in phone conversations and provide documents that appear legitimate, complete with the branding of reputable builders.
The scam typically involves requesting a hefty deposit for the proposed construction work, significantly higher than what is legally permissible.
Once the deposit is transferred, the scammers concoct a series of delays and excuses, and eventually, they vanish, leaving the homeowner out of pocket and without the promised work being started, let alone completed.
Recent investigations by Consumer and Business Services (CBS) revealed that at least three South Australians have fallen victim to this scam, with losses nearing $60,000.
These were not isolated incidents but part of a concerning trend that prompted the watchdog to issue a public warning.
Fraser Stroud, the Acting Commissioner for Consumer Affairs, emphasised the importance of consumers understanding their rights and ‘be especially vigilant when soliciting for building work online’.
To safeguard against falling prey to such scams, CBS suggested several precautionary steps.
Firstly, consumers should exercise caution when accepting quotes from individuals they haven't met face-to-face.
They also advised obtaining multiple quotes for any work to assess the prevailing price range, as a notably lower quote may indicate a fraudulent offer.
Additionally, consumers should independently verify the contact information of any businesses they are considering and directly reach out to them.
Understanding the legal guidelines regarding deposits is also crucial; for instance, in South Australia, deposits for building work costing between $12,000 and $20,000 should not exceed $1,000, while for projects exceeding $20,000, the deposit should be no more than 5 per cent of the total cost.
Furthermore, consumers should remain vigilant for potential red flags such as dubious website links or grammatical errors.
As South Australia issued a stark warning about insidious home construction scams, attention was drawn to the broader landscape of fraudulent activities within the real estate market.
With scam artists exploiting vulnerabilities in the housing sector, renters are particularly vulnerable to deceitful schemes.
The intricate web of deceit woven by these fraudsters poses significant risks to unsuspecting individuals, highlighting the critical need for heightened vigilance and awareness among consumers.
Have you or someone you know encountered a scam like this? What precautions do you take when hiring services online? Join the conversation below and let's help each other stay safe in the digital marketplace.
The state's consumer protection agency has sounded the alarm, warning that unsuspecting consumers have been conned out of tens of thousands of dollars through online work-for-hire platforms and digital marketplaces.
The scam operates by exploiting the trust of individuals looking to hire builders for residential work.
Scammers, posing as legitimate, licensed builders, had been responding to job posts on various websites, using business names and email addresses that closely mimic those of genuine businesses operating within South Australia.
These fraudsters are sophisticated and knowledgeable; they engage in phone conversations and provide documents that appear legitimate, complete with the branding of reputable builders.
South Australia’s consumer protection agency cautioned about a scam where fake builders request substantial deposits for home construction projects. Credits: Shutterstock
The scam typically involves requesting a hefty deposit for the proposed construction work, significantly higher than what is legally permissible.
Once the deposit is transferred, the scammers concoct a series of delays and excuses, and eventually, they vanish, leaving the homeowner out of pocket and without the promised work being started, let alone completed.
Recent investigations by Consumer and Business Services (CBS) revealed that at least three South Australians have fallen victim to this scam, with losses nearing $60,000.
These were not isolated incidents but part of a concerning trend that prompted the watchdog to issue a public warning.
Fraser Stroud, the Acting Commissioner for Consumer Affairs, emphasised the importance of consumers understanding their rights and ‘be especially vigilant when soliciting for building work online’.
To safeguard against falling prey to such scams, CBS suggested several precautionary steps.
Firstly, consumers should exercise caution when accepting quotes from individuals they haven't met face-to-face.
They also advised obtaining multiple quotes for any work to assess the prevailing price range, as a notably lower quote may indicate a fraudulent offer.
Additionally, consumers should independently verify the contact information of any businesses they are considering and directly reach out to them.
Understanding the legal guidelines regarding deposits is also crucial; for instance, in South Australia, deposits for building work costing between $12,000 and $20,000 should not exceed $1,000, while for projects exceeding $20,000, the deposit should be no more than 5 per cent of the total cost.
Furthermore, consumers should remain vigilant for potential red flags such as dubious website links or grammatical errors.
As South Australia issued a stark warning about insidious home construction scams, attention was drawn to the broader landscape of fraudulent activities within the real estate market.
With scam artists exploiting vulnerabilities in the housing sector, renters are particularly vulnerable to deceitful schemes.
The intricate web of deceit woven by these fraudsters poses significant risks to unsuspecting individuals, highlighting the critical need for heightened vigilance and awareness among consumers.
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