Building trust: Consumer protection agency warns consumers of ‘home con’ scams

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.

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.
Key Takeaways
  • South Australia’s consumer protection agency warned of a scam involving fake builders taking large deposits for home construction work.
  • Scammers were posing as legitimately licensed builders on online platforms and disappearing after collecting hefty deposits.
  • Consumer and Business Services reported that at least three South Australians recently lost nearly $60,000 to these scams.
  • The agency advised consumers to exercise due diligence, verify contractor details, understand legal limits for deposits, and look out for red flags to avoid being deceived.
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.
Make sure you thoroughly investigate the business to make sure it is legitimate. Go online and search for business name, seeking the business web page and look for contact details, phone numbers, address, owners name contact details. You can type in to google maps the business address and look to see if the business is actually located at that address. Look at contact details like phone number and see if there are any differences between what is advertised and what is on the web page. Do a search for the owner online and make sure the details match up. You can search for their business number or registration numbers to ensure they are a legitimate and registered business. If you have issues online, then you can contact the council or builder's corporation and ask if the business name and number are legitimate. Some building plans and additions need to pass council building codes and inspection so your local council should be able to tell you if a business is reputable or not.
I will never pay for work until the job is done. If they insist on getting a deposit I don't have a problem telling them to F O.
I live in NSW and have just been caught by the exact same scam. I found this builder on a services platform and he asked for a large deposit due to ‘just starting his own business’. Then the excuses began and we finally asked for our money back. We then got a court order to have his belongings removed to the amount he owed us so he made an offer to pay it off. We were told that we should allow him to do this, by the sheriff’s office. He made 1 payment and then disappeared. Now the Sheriff can’t find him to take his stuff to sell off and pay us back. Now the police are looking for him. Hope they find him but I don’t think I’ll ever see my money again.
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I will never pay for work until the job is done. If they insist on getting a deposit I don't have a problem telling them to F O.
When I get Quotes for the finished job? I then ask them what it is cash? I buy all materials ever since tried to screw me over the extra materials. Everyone I've ever known has two sets of books I've got a receipt. I've never had a problem
There will always some who thinks they need your money more than you do. I don't answer any phone calls I don't know the number, they have to leave me a message. I sometimes think alot of people get caught because they are lonely, some also think they are safe and going to make money .what you have is what you have .

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