Property manager fined after falling victim to a holiday accommodation scam (Vicki Redfern): Real estate bulletin issue 166 (December 2017)
21 December 2017
Property manager fined after falling victim to a holiday accommodation scam (Vicki Redfern)
A property manager has been reprimanded and fined $2,500 by the State Administrative Tribunal after falling victim to a holiday accommodation booking scam which resulted in a $45,000 loss for her employer, a Scarborough real estate agency.
Vicki Theresa Redfern had failed to exercise due skill, care and diligence, in breach of the Real Estate and Business Agents’ Code of Conduct, when dealing with the fraud in October and November 2015 in which overseas scammers had used fake credit cards to pay for bogus holiday bookings.
Using the name ‘Colonel Michael Warner’, the scammer contacted the agency, which specialises in short-term rental accommodation at residential apartments in Scarborough, to make a booking for three groups totalling $53,449. The scammer used seven credit cards to make the booking, three of which were declined.
At the scammer’s request, Ms Redfern transferred $25,138 and $20,066 from the agency’s trust account to third parties supposedly to pay for translation and tour guide services in advance. These funds have never been recovered. She went ahead after ignoring a warning from an office colleague that the requests were suspicious.
Ms Redfern faced disciplinary action by Consumer Protection after failing to:
- ensure the caller completed and returned agency forms sent in respect to the bookings;
- follow the agency’s practice of holding deposits in trust until all guests had vacated the accommodation;
- seek to verify the identities of the various credit card holders;
- seek to verify the identities of the third parties who received payment without providing any services or producing any invoices; and
- inform or seek instructions from the agency’s principal prior to transferring the large sums of money from the agency’s trust account and despite a colleague querying the legitimacy of the caller’s behaviour and requests.
Commissioner for Consumer Protection David Hillyard expressed disappointment that such a large loss was incurred through the incompetence of an employee.
“Verifying the identity of people involved in financial transactions within the property industry is now at the forefront of all of the Department’s training and communications with the industry,” Mr Hillyard said.
“So it is disheartening that in this case scammers could use the agency as a vehicle to steal credit card holders’ funds with relative ease, with not even the most basic checks being carried out.
“Just a quick internet search of the scammer’s name would have uncovered the fact that the name has been used previously in a variety of Nigerian based scams. Then to ignore the concerns from a colleague about the scammer’s unusual demands is entirely lacking in diligence.
“All principals of businesses in the property industry in WA must ensure that their staff, particularly those who are entrusted to operate the agency’s bank accounts, are well trained in fraud prevention methods and exercise a high degree of vigilance.
“Agencies must have practices and procedures in place to assist staff recognise scam attempts in order to thwart them before the criminals are rewarded and losses are incurred by the business.”
More information on the obligations of real estate agents and sales representatives is available on the Property Industry page of the Consumer Protection website or enquiries can be made by sending an email to Consumer Protection or by calling 1300 30 40 54.