How can identity theft lead to real estate fraud?

Apr 8th, 2021 | By FCT

Imagine waking up one morning to discover that someone has accessed your bank account, emails, and other highly personal information.  It’s a nightmare of a situation, one that can have devastating repercussions.  But identity theft is a terrifyingly real possibility these days, especially with so much of our lives being lived online.

But what exactly is identity theft? What does it mean for you? And how can this lead to real estate fraud? Knowledge is the best defense, so let’s take a look at these questions in detail.

What is identity theft?

In simple terms, identity theft is when someone obtains your personal information without your permission and uses it for their own purpose, which may include criminal means.

This information can be used to compromise you whether it’s by accessing your accounts, getting into your financial assets, using your identity to compromise others or defrauding people you know.

Consequences of identity theft

 Identity thieves can use your personal information for many purposes, including (but not limited to):

  • withdrawing or spending funds from your personal bank accounts;
  • getting new credit cards in your name;
  • starting new online shopping accounts in your name;
  • committing various financial crimes, for instance real estate fraud or applying for loans and lines of credit;
  • altering passwords and online account information, in turn blocking you from accessing them;
  • defrauding others while posing as you.

If any of these happen, your finances can be ruined, your credit rating destroyed, and your personal reputation damaged beyond repair. In a best case scenario, you will have to spend copious amounts of time untying the mess of problems. In a worst case scenario, you will need to involve lawyers, the police, and use other services to remedy the situation.

Social media and identity theft

Another form of identity theft involves individuals using your name, photos, and other personal information to pose as you online. This information can be used to create fake social media sites under your name as a means to harm your reputation or defraud people. Remember: any information that we post online or share with others via social media can be used if it’s obtained by people with bad intentions.

How identity theft occurs

There are numerous ways thieves can gain access to your personal information. There are physical ways, like stealing your wallet, phone, laptop or mail, going through your waste, or stealing credit card or other banking information during day-to-day transactions.

Then there are technological ways, like hacking websites to obtain information, phishing emails, fake websites, and defrauding you by posing as a legitimate company online to get access to your information. And this is only the tip of the iceberg. If you start to think about the ways in which thieves can access your personal information, you might want to get rid of all the technology you use.

Signs your identity has been stolen

You might be going about your life completely unaware that your identity has been stolen.  In fact, you might only discover it’s happened when you get a bad credit check. Luckily, there’s a free and easy way to find out if there are any anomalies in your credit history. Equifax Canada and TransUnion Canada both provide free credit check services either through the mail or online.  The government of Ontario recommends taking advantage of this service once a year, so you can be sure your identity hasn’t been stolen.

There are other indicators as well that your identity might have been stolen. If you start to receive phone calls from creditors regarding outstanding accounts–accounts you didn’t open, or if you see unexplained charges on your credit card bill, your identity might have been compromised.   Similarly, if you receive a call from the bank regarding an account in your name you are unaware of, you might be the victim of identity theft.

Basically, if you notice unusual behaviour in any of your accounts–whether it’s an email or bank account–or you begin to receive information regarding products of services you didn’t order, you should take action to determine if your identity has been stolen.

What to do to prevent identity theft

 By protecting yourself and being careful of what information you share and with whom, you can avoid falling victim to identity theft.  Some steps you can take are:

  • Enable two-step verification: Two-step verification on your email, banking, and other accounts makes it more difficult for people to access your personal information.
  • Use complex passwords: Abc123 won’t cut it. Use a combination of letters, numbers, and symbols to make “guessing” at your password impossible.
  • Change your passwords regularly: By changing your login information regularly, you decrease the chance of your accounts being hacked.
  • Use a password manager to implement a unique password for each subscribed service: If one service is compromised, the credential combination cannot be used to access other services.
  •  Have one credit card dedicated to online purchases: If this credit card information is stolen, you can easily cancel it without worrying about your day-to-day card.
  • Be careful of who you share information with: Never share information with unknown parties that you aren’t willing to share with everyone.
  • Call people back: If you receive suspicious phone calls, get the phone number, but do not use it until you verify that this is indeed a legitimate corporation and the phone number provided is accurate.
  • Don’t share personal information: Never share passwords, your social insurance number, or banking information with parties who do not require them by law.
  • Cover your PIN: It’s easy to look over someone’s shoulder while they’re occupied at a store or banking machine.
  • Avoid sharing personal information online:  Consider what you’re posting online before you do so. If you think it could be used to steal your identity, avoid posting it.
  • Avoid sharing personal information while on your cell phone in public: People can easily listen in to your conversations, and find out information you might not want them to have.

And if you ever have doubts about a situation, pause. Often times, people fall for frauds because they start to feel anxious and over-share information. By taking a moment to think and look at a situation objectively, or asking the advice of a trusted source like family or a close friend, you can often identify a scam for what it is, and avoid having your identity stolen.

Identity theft and real estate fraud

So how can identity theft lead to real estate fraud?  Consider the following two scenarios:

  • You’re finally close to paying off your mortgage. At least, that’s what you thought until you’re informed by the bank that there’s a lien on the property, and you have accrued a massive debt on the property–but you never borrowed money against your home.
  • You receive a call from the bank, and are told that you are behind in your mortgage payments. This news comes as a shock to you, as you had paid off your mortgage years ago. Through investigating, you discover that there was a second mortgage taken out in your name—one that you had no idea about.

In both scenarios, you have been the victim of identity theft. Someone has stolen personal information, pretended to be you, and borrowed money against your home. If a thief is able to access your banking information and SIN, they can open countless doors without you being aware of it.

And to make things worse, these types of fraud can take a long time to be detected. There’s no telling how much damage is being done to your credit rating and reputation. You might only discover these issues when you are hoping to sell your home, and these issues can jeopardize your ability to do so. Resolving these problems can also be time consuming and costly, therefore delaying your plans.

In order to protect yourself against the devastating effects of real estate fraud, and specifically title fraud, consider purchasing title insurance for your home.

Title insurance is a cost-effective way to ensure that certain problems related to the ownership of your property, including title fraud, are covered if the unforeseeable occurs. It also covers losses resulting from many risks not directly related to title, such as structures or renovations previously completed without required permits, unknown work orders, encroachments, liens, zoning and by-law violations. Additionally, you can purchase title insurance at any time, so even if you’ve owned your home for ten years, you can still get a policy.

Protecting yourself against identity theft and consequently real estate fraud, can save you a lot of stress—and money—in the long run.  Take the time to do a “personal security check-up,” and take advantage of a free credit check. You might also want to check out the Canadian Anti-Fraud Centre for tips on how to avoid identity theft.


Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.


Categories: Fraud

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