South Australia’s consumer watchdog is warning consumers to be on the lookout for a new scam targeting people seeking building work through online work for hire platforms and other digital marketplaces.

Consumer and Business Services is currently investigating reports of scammers masquerading as legitimate South Australian builders on websites, duping local consumers out of tens of thousands of dollars.

The scammers will respond to posts on sites pretending to be a licensed builder – often using an email address that is similar to that of an actual business – before seeking a deposit from consumers that is well above what is legally allowed in South Australia.

The scammer may send what appears to be a contract from the legitimate builder with the builder’s branding.

The scammer may even talk to their victims at length on the phone pretending to be the builder.

Once the deposit money has been paid, they’ll come up with reasons why the work needs to be delayed before eventually ceasing all contact with the consumer.

To date, Consumer and Business Services has been made aware of at least three South Australian consumers who have lost a total of nearly $60,000.

With the scammers making every effort to look like the real deal, CBS is reminding consumers to:

• take care, and conduct extra checks, if you are to accept a quote from someone who you have not met in person
• seek more than one quote to get a sense of what other, reputable traders are charging for the same work, because a significantly lower price can often be a red flag
• always independently source contact details for the business and contact them directly
• know your rights, and what is legally allowable for a deposit.

Often there are obvious red flags that can make a scam easy to detect, such as poor grammar or unconvincing web links.
This is far more insidious, as it can be quite convincing.

The scammers seem to speak with a degree of knowledge about what would be required in building work, and fraudulently take on the identity of a legitimate business.

This is why it’s so important to go beyond researching just the business by finding contact details independently so you can verify that the person you’re dealing with is who they say they are.

Acting Commissioner for Consumer Affairs Fraser Stroud said, "When choosing a builder, it’s essential consumers know their rights – especially when it comes to any request for a deposit."

"In South Australia, if the building work costs between $12,000 and $20,000, the deposit can be no more than $1,000.
And if the work exceeds $20,000, the deposit can be no more than five per cent of the total cost of the work.

"In these cases, the scammers have sought well above the amount that could be legally paid.

"I’d urge consumers to know their rights and be especially vigilant when soliciting for building work online."