Real Estate Frauds continued

Tips on Fighting Identity Fraud

Here are some tips to fight identity fraud:

  • Get picture identification from all the owners (unless you are absolutely certain of the identity of the clients through your personal knowledge).
  • Keep a copy of the identification in your files (front and back if applicable).
  • Give only the assurances you can to the lender (remember ss. 41 to 48 of the Land Title Act simply requires you to certify that you believe that the person signing is who they say they are, not that they are in fact who they say they are).
  • Be wary of powers of attorney or deals that must be closed urgently.
  • As in value fraud situations, if financing is involved be sure to follow the BC Code provisions (see below in footnote 5 and accompanying text), then advise the lender of the odd circumstances surrounding the mortgage loan and get further instructions from the lender documented in writing before proceeding with any advance.
  • Take steps to protect against corporate identity fraud (i.e., fraudster posing as authorized signatory):
    • obtain your own corporate search; don't rely on the client's copy;
    • obtain picture identification just as you would for an individual signing on their own behalf;
    • if giving a solicitor's opinion, don't make an assumption as to the genuineness of signatures;
    • satisfy yourself that proper corporate authority is given to the signatory and that any requirements in the bylaws regarding multiple signatures are met.

5 Ideally you will have a signed conflict consent as required by Appendix C, rule 5 of the BC Code. However, that may not have happened if you have been dealing with a fraudster. But even if you have not been able to obtain the signed conflict consent as required in Appendix C, at least make sure you have advised your clients of all the information contained in Chapter 3, rules 3.4-5 to 3.4-7 of the BC Code. (In essence, tell all clients nothing can be kept in confidence one from the other and that you will be disclosing all relevant information.) Document that advice in your file and it will go a long way toward allowing you to tell both clients all salient information. If for any reason you feel that you are compromised in your ability to discuss the information with the lender, contact a staff lawyer at the LSBC to discuss the best way to proceed.

Community Discussion

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The link to Appendix C of the Code does not seem to be working.