How to avoid losing your deposit to a settlement scam

Buying a home means moving large sums of money, often by electronic transfer, under time pressure. That is exactly what scammers target. Payment redirection scams around property settlement are rising, and buyers have lost tens and even hundreds of thousands of dollars. This guide explains how the scam works and how to protect yourself.

How the scam works

The scam is simple and effective. A scammer gains access to an email account, often a party to the transaction, and watches for a settlement approaching. At the right moment, they send an email that looks like it comes from your conveyancer, solicitor, or agent, with bank account details for you to transfer your deposit or settlement funds to. The details are the scammer's.

The email is convincing. It uses the right names, the right logos, sometimes a copied or faked form, and it arrives when you are expecting exactly that kind of message. You transfer the money, and by the time anyone notices, it is gone.

Through 2026 there have been reports of buyers nearly losing more than a million dollars, a first home buyer losing tens of thousands, and a tradesperson losing more than a hundred thousand dollars, all to variations of this scam. It is not rare, and it is not only the careless who are caught. It is designed to catch careful people on a stressful day.

The warning signs

The things to watch for are small and easy to miss under pressure.

• An email with new or changed bank account details, especially close to settlement.
• A message creating urgency, telling you to transfer quickly to avoid a delay.
• A slightly different email address, or a reply that does not quite read like your solicitor.
• An attachment, such as a payment form, that you did not expect.

The core rule is this. Treat any bank account details that arrive by email, or any change to details, as suspect until you have confirmed them another way.

How to protect your deposit

A few habits defeat almost all of these scams.

• Confirm account details by phone, using a number you already have. Before you transfer anything, call your solicitor or conveyancer on the number from their website or your signed engagement, not a number from the email. Confirm the account details with a person.
• Never rely on details that arrive or change by email. If account details change at the last minute, stop and verify. Legitimate changes are rare and worth a phone call.
• Transfer a small amount first. Send a small sum, confirm it arrived in the right account, then send the rest.
• Use Confirmation of Payee. Australian banks have rolled out Confirmation of Payee, which checks that the account name you enter matches the account. If you get a name mismatch warning, stop.
• Act immediately if something feels wrong. If you suspect you have transferred to the wrong account, call your bank straight away. Speed matters, because funds can sometimes be recalled if you act fast.

What we do to protect your funds

This is an area where how your lawyer works matters. On our conveyancing matters, we give you our trust account and payment details in a reliable way at the start, we tell you that our details will not change by email, and we ask you to call us to confirm before you transfer. We use electronic settlement through PEXA, and we are careful about how account information is communicated.

Our standing advice to every buyer is the same. If you ever receive bank details or a change of details from us by email, do not act on it. Call us first. We would always rather take the call than see a client lose their deposit.

If you have been scammed

If you think you have transferred money to a scammer, act immediately. Call your bank and ask them to try to recall or freeze the funds. Report it to Scamwatch and to the police through ReportCyber. Tell your solicitor or conveyancer. The faster you move, the better the chance of recovering some or all of the money, though recovery is never guaranteed.

Frequently asked questions

How do property settlement scams work? A scammer sends an email that looks like it is from your solicitor, conveyancer or agent, giving bank details for your deposit or settlement funds. The details are theirs, and the money is hard to recover once sent.

How can I be sure the bank details are genuine? Call your solicitor or conveyancer on a number you already have, not one from the email, and confirm the details with a person before you transfer.

What is Confirmation of Payee? A bank system that checks the account name you enter matches the account. A mismatch warning is a reason to stop and verify.

What should I do if I have paid a scammer? Call your bank immediately to try to recall the funds, report it to Scamwatch and ReportCyber, and tell your solicitor. Speed is critical.

Keep reading

• Property and conveyancing
• Buying a home in NSW: the conveyancing process explained
• The contract for sale of land: what to check before you sign

This article contains general information only and is not legal advice. For advice about your situation, please contact us. Liability limited by a scheme approved under Professional Standards Legislation.