Identity Verification Standard and PracticeMurray DollingAssistant Registrar of TitlesA/Manager Titles Dealings SectionLandgate

LSLB/SSSI Seminar Bunbury 25 November 2011

Purpose of the Presentation

Advise SSSI/SWAGS members about:

Statistics and fraud generally

Need for a partnership

Landgate’s role and recent actions to minimise the risk of title fraud.

Latest changes to identity verification for the conveyancing industry.

StatisticsTransaction levels

Currently 240,000 registrations pa (lowest levels in 25 years)

Normal market level 340,000 registrations paBoom period 05/06 486,000 registrations pa

Dollar Value of Interests RegisteredTransfers of land Between $40 and $45 Billion paMortgages Between $45 and 50 Billion pa

Significant market to attract Fraudsters

Fraud is rare in WA 10 year averages are between 1 and zero per year

Identity Fraud

Three types of identity fraud in Land Dealings:

Mortgage Fraud - impersonating registered owner as borrower in giving mortgage to lender

Title Fraud - impersonating registered owner as vendor in sale to innocent buyer for value

Title & Mortgage Fraud - impersonating registered owner as vendor in sale to self and giving mortgage to lender in own name

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How Often Nationally?

1 title fraud in every 350,000 transfers

1 mortgage fraud in every 133,000 mortgages

3.5 mortgage frauds for every title fraud

50% of claims resolved with a paymentBased on consolidated statistics from NSW, Qld and WA for the 10 years to 2010.

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Mortgage Fraud

Title Fraud Title &

Mortgage Fraud

CLAIMS PAID

Claims Made

Claims Resolved

Claims Paid

77%

39%

100% 78%

16%

6%

By Whom? - National figures

48% family of the registered owner being impersonated22% relatives & friends of the registered owner25% advisers (practitioners, planners, brokers & business associates) to the registered owner5% persons unconnected to the registered owner

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Based on consolidated statistics from NSW, Qld and WA for the 10 years to 2010.

Family

Advisers

UnconnectedPersons

Relatives &Friends

48%

22% 25%

5%

Take Aways from the Statistics (1)

70% of fraud is committed by family and friends of the registered owner

95% of fraud is carried out by persons who are previously known to the registered owner

Dispels the myth that all fraud is committed by strangers.

Take Aways from the Statistics (2)

Fraud is a family affair

Look out for spouses, children, grandchildren, especially son in law, daughter in law

In Business - Look out for business partners and co-directors

Mortgage fraud is the most common fraud committed.

Partnership to reduce Fraud risks Landgate wants to work in partnership with the property industry to reduce the risk of fraud

All industry and government has a part to play from the real estate agent to the Lawyer or settlement agent to the banks and finally to Landgate, Department of Commerce and Police.

Contact Landgate, Commerce or WAPOL Fraud Squad if you are concerned about an attempted or actual fraud.

Partnership benefits

The Partnership to reduce fraud risks is important because of 2 main benefits:

– Protects your clients interests; and

– Supports security of title and maintains public confidence in the Torrens Title system.

Landgate’s RoleWorking jointly with Commerce REIWA, AICWA and WAPOL on Fraud. Five pronged approach.

Landgate at end of the sale process after the fraud has occurred and after the money has gone.

Torrens title system provides immediate indefeasibility and Certainty of Title.

Landgate’s recent actionsCaveat (Improper Dealings)

Overseas witnessing

Extra scrutiny of documents signed overseas

Review of overseas signed transfers

BackgroundTwo recent alleged property frauds

Identity theft, forged documents

Identity verification at time of listing

Identity verification before settlement

Copycat Fraud in WA

Only a matter of time before a copycat fraud occurs with a transfer that is signed within WA

New Identity Verification Standard

Involves all transfers not just those signed overseas

Visual Identity Verificationof all Sellers

Done when the transfer is signed

Who must be identified?The Identity Verification Standard must be applied to:

The seller(s) not the buyer;

The sellers representative e.g. attorney/executor signing on behalf of the seller/owner

Each person signing and/or affixing a seal on behalf of an incorporated body (Company/Incorporated Association) named as transferor.

Identity Document Production

Transferor must produce to the Identifier original identity documents

At least one of the original identity documents sighted must include a photograph and a signature.

Visual Identity Verification

Person whose identity is being verified is to present themselves to the Identifier

Identifier is to satisfy themselves that the person is of the same appearance.

Compare signatures on documents

Who can do identity verification?

Within Australia

Outside Australia

When must identity verification occur?

Every transfer

At time of execution

Summary (1) Frauds are rare in WA but they have a devastating effect on the owner

Remember we cannot prevent all frauds but…Early detection is key……..

Partnership between Government and Industry will reduce fraud risks by more rigorous client identification practices at the:

• Beginning of the transaction when first instructed to sell by properly identifying your client;

• Middle of the transaction when the transfer is signed by identifying;

• End of the transactions when documents are lodged at Landgate.

Summary (2)Why?

Because it

– Protects your clients interests; – Supports security of title and maintains public

confidence in the Torrens Title system.– Maintains the property industry as a whole– Maintains your bottom line

The end; any questions ?