Fraud is alive and well in B.C.
Jan 26th, 2017 | By Marie Taylor
I am sure by now many of you have read the Fraud alert: Notices to the Profession published by the Law Society of B.C.
So as a legal professional, what can you do to protect yourself and your clients from the devastating effects of fraud? In addition to the tips provided in the Law Society’s publication, as an expert in detecting and deterring fraudulent real estate transactions, FCT has compiled a list of best practices to assist in avoiding fraud:
- Whether you are acting for a vendor or borrower, always insist that the balance of the proceeds are made payable to the registered owners after payment of secured creditors, taxes, legal fees, bank loans, credit cards, etc. and not to third parties. If the borrower or vendor owes money to a third party that does not appear to be related to this transaction, they can deposit the balance of the proceeds into their bank account and cut their own cheques. In most fraudulent transactions, funds are made payable to third parties, which allow the fraudsters to quickly negotiate the funds and disappear.
- Be wary of very quick closings where you do not know or have never acted for your clients. Most fraudsters go to solicitors/notaries who do not know them and hope to pull off the fraud quickly.
- Question transactions being signed under Power of Attorney. Why is the Power of Attorney being used and can you contact the Donor? Review the Power of Attorney carefully.
- Read your lender client’s mortgage instructions carefully and ensure you comply with their fraud requirements.
- Get title insurance for both your lender and purchaser clients in order to protect them from the devastating effects of title fraud.If you didn’t have the opportunity to attend one of our fraud seminars, you can still view it online and obtain CPD credits, by clicking here.
Have you come across any fraudulent transactions recently? Please share your stories with us.