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Brokers warned about app scams

by James Mitchell6 minute read
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Potential web innovators are being warned about the dangers of being “done over” by app developers claiming to be based in Australia but are actually producing apps for a fraction of the cost overseas.

According to Anushka Bandara, co-founder and CEO of Elegant Media, Australia’s only ISO 9001 accredited app developer, the app development sector is one of the fastest growing technology industries in the world.

“Developing an app can be complex and involves high levels of coding and knowledge of the regulatory environment,” the CEO said.

“Apps need to be useful and safe to use. Many people are finding app developers online who claim to be based in Australia and are able to make their app for a fraction of the cost.


“Unfortunately, many Australians are falling for the misleading advertising and fake reviews and throwing away tens if not hundreds of thousands of dollars on these app development scams. When they try and track down the developers, they find they are actually located overseas somewhere.”

According to simplyaskit.com.au founder Paul Ryan, while some overseas app developers can provide a genuinely good service, any broker considering building an app should have a locally based professional involved in the process.

“It is also important that brokers question why they want to develop an app in the first place,” Mr Ryan said, adding that, unlike a website, which benefits from search engine optimisation (SEO), apps require a significant marketing investment in order to gain traction.

“You need to ask yourself what the app will do that a responsive, mobile-compatible website won’t,” the founder said.

“Most developers are either proficient in iOS or Android. If you want an app developed that is compatible on both Apple and Android devices, make sure you do your research and know the costs before you sign any contract.”

Elegant Media’s Mr Bandara said that Australians should do their homework and get referrals from trusted sources, meet with developers and review their work and put in place clear deliverables and timelines.

“By following these key steps, this will assist people to avoid the scams,” the CEO said. “There are many good operators in the app development space, including our firm, and we would like to help people to have a good experience developing an app, as it should be a positive and rewarding experience.”

Earlier this year, Australian Lending & Investment Centre (ALIC) managing director Jason Back warned that brokers should think twice before investing in something they “don’t understand”.

“Technology’s a really exciting space, and I think we often have fear of change, as most people generally do,” Mr Back said.

“[I] just think sometimes we’re not great at understanding the technology that’s available. One of the things that we’re really cautious about is entering into markets that we don’t understand.”

Mr Back urged brokers to seek advice from experts before investing in measures to integrate technology into their business’ practices.

“Now, I go and talk to other brokers [and] I’ve seen brokers out there who are bringing in IT people into their business. I sit there and go, wow, that’s courageous.

“Do I want to drop another $70,000 or $80,000 a year on having a programmer in my business to be creating the apps or tech bolt-on solutions to my existing tech when things are moving so far?

“I think people need to be really cautious about how much they get involved in creating the tech, versus letting the tech get created around them, and effectively using turnkey solutions.

“I’d be more inclined to speak to what you’re very good at and let experts in the other fields develop those tools.

“Yes, they might cost a little bit more, yes, you won’t have them exclusive, but is that the main part of your business? Because for us, advice is our business; education is our business.”

Mr Back believes that technology will have an important role to play in the industry’s future, but he does not see it “taking over the industry”.

[Related: Brokers urged to take a cautious approach to tech]

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James Mitchell

James Mitchell


James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.


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