The integration of artificial intelligence (AI) in real estate has revolutionised property transactions, offering tools for better property analysis and customer engagement. However, criminals are exploiting these advancements to perpetrate sophisticated scams that can be used to target property buyers and sellers in South Africa.
Let’s dive into how these scams work and, most importantly, how to protect yourself.
Scammers are getting smarter with the help of AI
The use of deepfake technology for identity fraud
The advancements in AI-driven deepfake technology allow criminals to convincingly mimic the voices and appearances of trusted individuals. For instance, fraudsters may impersonate property owners or estate agents to deceive buyers.
This technology has been used globally to impersonate CEOs and bypass verification systems, and similar tactics are now being deployed in property transactions in South Africa, where impersonation fraud has surged by over 350% in recent years.
The rise of synthetic identities for fraudulent transactions
A synthetic identity - or a fake person - is not a new concept, but criminals are perfecting their scams with the use of advanced AI tools that can make even the fakest of identities seem real. Using AI to generate legitimate-looking identity documents, social media profiles, and backgrounds that can fool even the smartest of people.
The synthetic identities are used to pose as legitimate buyers, sellers, or agents, enabling them to complete fraudulent transactions or siphon funds during payment processes.
Enhanced phishing scams
A scam that has been around for decades has been kicked into high gear with the help of AI as scammers use it to improve the quality of fake emails, making them appear as legitimate communication from banks, property portals, or law firms. These scams often lure victims into sharing sensitive financial details, facilitating theft.
AI chatbots in social engineering
Fraudsters deploy AI chatbots to engage potential victims in lengthy conversations, building trust and credibility before executing scams. These bots can convincingly impersonate estate agents, property managers, or financial consultants to manipulate buyers into making deposits for non-existent properties.
This is bolstered by the advancements in deepfakes where videos can be manipulated and voices faked, making it harder to discern between what is real and what is fake.
Manipulating online listings
AI tools can automate the creation of fraudulent property listings with images and descriptions pulled from legitimate sources. In South Africa, these listings often target buyers seeking affordable homes or rental units. Victims are persuaded to pay deposits or transfer fees before realizing the property doesn't exist.
In a tight rental market, tenants might often feel like they need to take risks they normally wouldn’t to secure a property, paying a deposit for a property they haven’t viewed in person, only to arrive at the address and find out the property wasn’t for rent—or even for sale. By the time the scam is uncovered, the scammers disappeared.
Hijacking transactions through AI
Criminals use AI to intercept communications between buyers and agents, altering payment instructions. Known as Business Email Compromise (BEC) scams, these tactics redirect funds to fraudulent accounts. AI enables scammers to analyze email patterns, craft convincing messages, and bypass basic security measures.
Scammers can easily impersonate a property agent to intercept emails between a buyer and a seller. Using AI-generated messages, they can then change payment details, redirecting funds to their account. The buyer is left thinking everything was legitimate and unknowingly transferred a substantial amount to the fraudsters.
How to protect yourself against AI-driven scams
Now, the good news: there are ways to stay safe. Here are some practical steps:
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Double-check payment details: Before transferring any money, confirm payment instructions directly with your agent or attorney—ideally in person or through a verified phone number. Avoid relying solely on email.
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Be wary of red flags: If a deal feels too good to be true, it probably is. Scammers often pressure victims to act quickly, so take your time to verify everything.
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Use secure communication: Stick to encrypted messaging platforms or verified communication channels, especially for sharing sensitive information.
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Educate yourself: Stay updated on the latest scams and how they work. Awareness is your best defense.
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Demand transparency: Work with reputable agents or firms. Check their credentials, licenses, and reviews. A quick online search can reveal a lot.
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Invest in verification tools: Tools like multi-factor authentication and fraud detection software can add extra layers of security to your transactions.
Always call the agent you are working with if there are sudden changes to documents, contact details, or payment information. Verify that the changes are legitimate. If you see an online listing, go to the agency website and verify the contact details they have for the agent online.
Using a reputable property platform like MyProperty will also ensure that you are working with verified agents with a valid Fidelity Fund Certificate.
We’ve also compiled a guide on the red flags to watch out for in property transactions to help spot potential red flags quicker. You can read it here.
AI - the bigger picture
AI isn’t just a tool for scammers—it can also help fight fraud. For example, real estate companies are starting to use AI to detect fake documents or unusual transaction patterns. Some systems even flag when a payment doesn’t match the standard process.
By being proactive and vigilant, you can outsmart scammers and make your property journey a safe one. After all, buying or renting a home is stressful enough without the added headache of fraud!
