How a Single Email Made Louis Lose His $110,000 House Deposit

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With every ping or buzz potentially being a scam, how can we detect any red flags and safeguard ourselves? Insight learns from those who’ve been severely affected by scammers but are fighting back. Watch the Insight episode Scammed on Tuesday 8 July on SBS at 8.30PM or stream live on SBS On Demand.

Louis May, confident in his tech skills, never imagined he could be scammed.

“I was quite overconfident at the time,” Louis told Insight.

“I thought … being young, I wouldn’t fall for a phone scam.”

So, when Louis got an email that seemed to come from his lawyer, he never predicted it would result in the loss of his $110,000 house deposit.

Louis had put in long hours as an electrician, working six days a week for years, and managed to save enough for his first home at 23.

During the buying process, his lawyer communicated using two email accounts. When he received a new email requesting him to complete a Property Exchange Australia (PEXA) form, it didn’t raise suspicion.

Following the email’s guidance and after banking discussions, he moved $110,000 to a different bank account.

When his property was meant to settle, Louis’ lawyer informed him the $110,000 wasn’t received.

“I told him I followed his instructions, but he replied, ‘I never sent an email about a PEXA form’, and my heart sank.

“That’s when I knew I was scammed.”

‘You can’t think straight’

After Vicky Schaefer noticed a $1,500 transaction in her banking app, she knew she hadn’t made herself, she immediately contacted her bank’s fraud department.

She asked the bank to freeze all her accounts, which the bank did, and it told her it would call her back when it had more information about the fraudulent charge.

Three hours later, Vicky received a call — from who she thought was her bank — claiming someone was trying to breach her account again.

“[The caller ID said it was my bank’s] fraud department. I thought that’s amazing; they got back to me so quickly.”

But it was not her bank. It was a scammer who had cloned the bank’s phone number.

a woman with glasses and an updo smiles into camera an office in front an indoor plant

Vicky’s bank account was drained of $47,000 by scammers. Source: SBS

The scammer then took over Vicky’s phone by way of verification codes and took $47,000 out of her bank account while she was on the phone with them.

“All I could do was to sit there and watch all my money just get taken out of my account,” Vicky said.

“These scammers put you in such a panic, you can’t think straight.”

Disrupting the scam syndicates

A cybercrime is reported every six minutes in Australia, according to Cody Nagel, who works for the Australian Federal Police (AFP) in its Joint Policing Cyber Crime Coordination Centre.

He said scams are driven by internationally based organised crime networks, often operating like a business with different arms, with scams funding other kinds of criminal activity.

“Scammers work tirelessly, adjusting their schedules to target different regions when potential victims are most vulnerable,” Nagel explained to Insight.

a young male police officer standing in his uniform in an office with green leaves of an indoor plant behind him

Cody Nagel works in the AFP’s Joint Policing Cyber Crime Coordination Centre. Source: SBS

Nagel said the AFP is focused on bringing public and private industry together to disrupt and prosecute scams.

“I can look across the room at somebody from a financial institution and say: ‘Do you have a bank account with this number? Can we stop that money? Can we get that money back for this customer?”

With further collaboration and sharing of intelligence between banks and law enforcement, Nagel suggests scams can be disrupted.

“We acknowledge that we can’t actually arrest our way out of this problem,” he said.

Australia’s world-first scam prevention legislation

In February, Australia passed world-first scam prevention legislation with the new Scams Prevention Framework.

Under this legislation, banks, mobile networks, and social media companies are required to take reasonable steps to prevent, detect, disrupt, and report scams, or face significant fines.

The Australian Financial Complaints Authority (AFCA) acts as the external dispute resolution scheme for the first three sectors (banks, telcos, and social media companies) — helping people to resolve disputes with banks, insurers and superannuation funds.

However, some consumer groups have criticised the framework legislation, as it won’t force offending businesses to automatically compensate scam victims.

The UK has introduced a scheme that forces banks to reimburse a customer who has been scammed, usually within five days — provided they haven’t acted with gross negligence or fraudulently. Some groups have called for a modified version of UK model to be implemented in Australia.

AFCA CEO David Locke said Australian law has largely been inadequate when it comes to scams.

He believes that mandatory codes would ensure stronger action and a stronger chance for fair dispute resolution.

“Most people out there would never for a minute think that banks are not required to check the name that’s given against the BSB and account number,” he told Insight.

(Many banks have started to implement confirmation of payee this year, an anti-scam measure checking that bank details match the account name.)

Locke said he hopes the new framework legislation will lead banks to take further steps to protect consumers.

Dealing with the aftermath

Louis’ mum Alex Brooks helped him navigate the aftermath of being scammed.

“Someone obviously had breached his confidential home-buying details,” she said.

Since the scam, Alex has interviewed multiple cybersecurity experts and has paid thousands of dollars for website forensics. She says that her findings infer that Louis wasn’t responsible for the breach of his details.

Alex says Louis’ bank offered him a remediation payment of $1,000, which he did not accept.

“It beggars belief what goes on as people try to seek justice and restitution,” Alex said.

Vicky has also had a trying time getting financial reparation.

Even though it was the bank’s number that had been cloned, Vicky felt it was blaming her for the funds lost in the scam.

However, after hiring a lawyer, Vicky says her bank reimbursed her almost a year later.

I thought it was going to be a really, really good time in my life. But unfortunately, I’ve been knocked way back down.

Louis May

Unlike Vicky, Louis has not been able to recover the money he was scammed out of. He says he still feels the toll.

“I thought it was going to be a really, really good time in my life. But unfortunately, I’ve been knocked way back down.”

Louis, now 24, was still able to settle on the small apartment after receiving a loan from a family member; but is now paying an extra $600 a month in interest.

“It’s pretty heartbreaking,” he said.

“I feel like I’m further back than I was last year — even still now.”

If you or someone else is in immediate danger, call 000.

If you’ve had your personal or financial information stolen, immediately contact your bank or credit card provider and tell them to stop any transactions. You can report scams to Scamwatch or ReportCyber.