Title insurance and the case of the trick and the treat

Oct 26th, 2015 | By John Tracy

How title insurance protects against the evils of fraud

Fraud, in all of its forms, is a growing common problem in North America. And the real estate industry is no exception. FCT continues to pay out more as a result of title fraud than almost all other claim types. As mentioned in our previous blog post entitled The scary truth about title fraudFraud is a horrible crime with very scary consequences — both emotional and financial — for its victims.

The tale

Imagine this: a young man named Steven* worked hard for years to accrue significant savings, which were diligently put aside while looking for the best way to invest. After much thought, Steven decided to use the bulk of his savings and invest in real estate — what he and his advisors thought to be a safe bet. He purchased an income property for $204,500, and on the sage advice of his lawyer, an FCT homeowner title insurance policy as well.

The trick

Two years after the purchase, a notice was delivered to the property stating that the mortgage was in default and the lender would be taking possession of the property. Confused, Steven sought counsel as he knew that his mortgage was in good standing: he had never missed a payment! Was someone playing an evil trick? Or was it simply a mix up? Steven was beyond stressed, worrying about his investment and his credit rating.

Upon investigation it was revealed that the title had been fraudulently transferred from Steven as the insured homeowner and that the accompanying files did not contain any identification, nor any signed documentation. A new, fraudulent mortgage in the amount of $165,000 had been put on the property, paid to an unknown individual who, along with the funds, had disappeared into thin air . . . .

The treat

Luckily for Steven, he was covered. Because his lawyer had a thorough understanding of title insurance and recommended Steven purchase an FCT homeowner policy to complement the mandatory lender policy, he had comprehensive coverage to fall back on.

FCT paid out $12,548.09 in legal fees to remove the mortgage from title and transfer the rightful title back to him. Steven was able to retain his investment property, while being spared the time, expense and stress of having to defend his himself against the fraud. A huge treat indeed!

Don’t be a victim

We say this time and time again, but it bears repeating — you don’t have to be a victim of title fraud. FCT is your best line of defense against fraud and offers you:

  • Simple, effective title insurance solutions;
  • The best underwriters in the business; and
  • A certified fraud expert on staff.

To learn more about how to treat yourself to the peace of mind that comes from knowing you’re protected against the tricks of today’s fraudsters, comment below or contact us at one of the following numbers:

Homeowners call 1.877.888.1153
Lawyers call 1.866.804.3122




*Names and specific details may have been changed to protect the privacy of those involved.

Insurance by FCT Insurance Company Ltd, with the exception of commercial policies. Subject to certain exceptions, commercial title insurance policies equal or below $10M CAD are provided by FCT Insurance Company Ltd. Commercial title insurance policies above $10M CAD are provided by First American Title Insurance Company. 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, Title Insurance

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