Intensive joint investigation into real estate scams

Five government agencies have launched a joint investigation into recent real estate scams to determine if extra protections are necessary to prevent identity theft in the buying and selling of property and the land titles system in Western Australia. 

The Commercial Crime Division of WA Police, Consumer Protection, Landgate, the Real Estate and Business Agents Supervisory Board (REBA) and the Settlement Agents Supervisory Board (SASB) have joined forces to thoroughly investigate the circumstances surrounding the alleged fraudulent sale of a Karrinyup home in August this year. 

The agencies will jointly carry out an intensive analysis of the sequence of events which allowed this property to be fraudulently sold and consider measures that will be aimed at minimising the risk of a repeat occurrence. 

Similarities to an attempted fraudulent sale of a West Perth apartment in 2008 will also be studied as part of the extensive review. 

Officer-in-charge of the Major Fraud Squad Detective Senior Sergeant Don Heise said both these cases involved scammers from Nigeria with possible collaborators in South Africa. 

"It appears there was an interception of the landowner's mail in South Africa, where the fraudsters stole his identity and falsified a number of documents. These were then sent to the relevant real estate agent in Perth," Det Snr Sgt Heise said. 

Characteristics of the 2010 successful scam that could be a warning to absentee home owners, real estate agents and settlement agents are:

• Notification of a change of contact details, email and postal addresses of the property
  owner prior to the sale request; 
• Sale was communicated as urgent for business or other personal reasons; 
• Promise of future sales through the agent as an incentive to cooperate with a speedy
  sale and settlement; 
• Documents from Notary Public in Nigeria, verifying documents and identity; 
• Request for a short-term loan before settlement; 
• English in some of the correspondence very basic or poor. 

A Perth real estate agent reported to REBA on Friday 17 September 2010 that there had been an attempt to sell a property by a bogus owner. REBA Chairman Mark Cuomo said the bogus owner's name didn't match that of the registered proprietor so it was quickly identified as a fraud attempt. 

"The style of this approach was different to the other cases but highlights that the fraud attempts might increase after the success of the Karryinyup case," Mr Cuomo said. 

"All real estate agents must now be increasingly vigilant against these types of scam attempts and carry out extra checks to verify an owner's identity, particularly those who are selling local property while overseas. 

"It would be an effective fraud-prevention practice that, if a property owner changes their postal or email address, they should send a confirmation to the old address to make sure the new address is genuine.

Similarly, if phone and fax numbers change, try the old number to double check. 

"We would also suggest to agents to ask questions of absentee owners that only the real owner would know, perhaps about the last sale or characteristics of the property." 

"Agents could also consider asking for selling fees up front, as scammers will most likely be discouraged from pursuing the sale or will make up excuses as to why they can't pay them. 

"The onus, however, is on the agent to exercise due diligence in these situations and to be extra vigilant. It is imperative that agents adequately manage the risks involved in these sales, and, ultimately, if there is any doubt, they should report their suspicions to the proper authorities and not proceed with the transaction." 

SASB Chairperson Mirina Muir said that often the settlement agent is considered to be the last line of defence against inappropriate property transfers. 

"We would encourage all settlement agents who are currently, or will be in the future, dealing with absentee owners to be ever vigilant and double check the validity of documents that have originated overseas," Ms Muir said. 

WA's Registrar of Titles Bruce Roberts has reminded professionals within the property industry to ensure that identity verification is included in their practices. 

"Conveyancers and other property professionals should take steps to clearly identify that the person they are dealing with is the registered owner on the land title," Mr Roberts said. 

"These checks could involve the 100-point system where the owner must produce multiple sources of identity with photographs and signatures, such as passport and drivers' licence, as well as independently verifying the owner's address through an employer or a rate notice from the local council." 

Commissioner for Consumer Protection Anne Driscoll said scams are now becoming more professional and more elaborate. 

"The forging of signatures and the production of fake documents is, in some cases, highly professional so these scam attempts may not be so easily spotted. It's important that all businesses have a system in place to verify the legitimate owner before money changes hands, especially if the person they are dealing with is unknown to them and comes from overseas." 

A checklist of what agents should consider includes: 

• Check signatures with those that may already be on file from previous transactions 
• If official documents look suspicious, have them independently verified by the issuing
  authority 
• If a request for change of address is received for the property, send confirmation to old
  address as well 
• If being asked to sell house remotely, ask questions about the property that only the
  real owner would know 
• Consider a 100-point identity verification system which includes passport or driver's
  licence with photograph and signature, as well as independent proof of address from
  employer or local council