Fraud and investment scams go hand-in-hand in the real estate sector. It can be in the form of a contractor who charged hundreds of dollars for work not done or an ‘investment agent’ who embezzled a large amount in return for fake promises. These experiences are common in Alberta and Canada as a whole, so here is a list of the most common types of scams:
1. Property investment seminars and courses
While educating yourself about property investment is necessary, it is equally important to receive information from reliable sources. Today, a number of investment seminars that are conducted in Alberta charge excessive prices for the event and provide the recipient with information that is completely illegal. They not only provide the audience with inappropriate information about the real estate sector, but also force them to act on them, contributing to further loss.
2. Online rental scams
With the increased dependence on the Internet, the number of online rental scams has also increased. This is one of the reasons why such scams are so common in Alberta.
Generally, online scams start with the scammer posting ads of houses online for low prices. Once a prospective tenant is identified, the scammer dupes the buyer by impersonating landlords, property managers or estate agents.
Then, to avoid visiting the plot, they pretend to be unable to meet buyers at the site and suggest meeting off site. That way, they continue with the proceedings like exchanging keys, signing a tenancy and collecting rental deposits, without being caught. In such situations, victims only realize that they’ve been duped after they show up at the property.
3. Title fraud
These scams can be experienced by almost everyone, but they are most common among people who don’t safeguard their personal information. That way, impersonating people gets easier and more believable, since they have access to personal information.
In this type of scam, the scammer relies on identity theft of property owners. Through false documents, scammers convince buyers of their identity, then forge documents for transferring the ownership of the property to his or her name and on the basis of that document, acquire new mortgage. Once the mortgage has been secured, the scammer flees, leaving the owner on the hook for future payments.
4. Foreclosure and home-equity fraud
Scammers who are successful in foreclosure and home-equity fraud target property owners who are struggling with a cash crunch, such as mortgage payments or other form of payments. This is because it is easier to entice people in such a condition with loans to cover their debts and put their own (scammer’s) demands forward. Generally, these demands include upfront fees and an agreement to transfer the property title.
Once the property owner falls prey, the fraud remortgages the property and absconds with the money, leaving the former property owner without the home but still in debt.
5. Home improvement scams
In such scams, the scammer approaches the victim withunsolicited offers and deals that are too good to be true. One of the most common tricks used to entice victims is: repave a driveway at an economical price or fix roofing using leftover material from a previous job. After convincing victims of their offer, their next step is to get the money in cash or cheque before doing the job. This is a very common method used to dupe people for money.
Scams are common and so are the means to prevent them. Often, fraud prevention tips may seem like common sense, but not following them is still the most prominent reason why people get duped. The key to avoid being duped is by being informed and vigilant of the various scams. Have you experienced, or know anyone who has, any scams other than these four? Let us know.