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Taskforce investigates real estate scam

Issue Date: Thursday, 11 August 2011

A joint taskforce comprising investigators from Consumer Protection, WA Police Major Fraud Squad and representatives of Landgate is investigating a reported real estate scam.

A couple returning from overseas have advised authorities that their property has been sold without their knowledge or consent and a joint investigation has been launched.

The previous owners were living and working overseas at the time and didn’t discover the property had been sold until they recently returned to Perth to inspect the property.

The real estate agent involved has told investigators that he received a phone call from a man claiming to be the owner in February this year inquiring about the property. Shortly after, the agent received an urgent request to sell the property as funds were needed for a business investment, later revealed to be a supposed petro-chemical project.

Detective Senior Sergeant Pete Davies of the Major Fraud Squad said it appears the scam originated in Nigeria and there are some similarities to the fraudulent sale of a Karrinyup property in September last year.

“We are in the early stages of a full criminal investigation and examining computer, phone records and bank accounts,” Det Sen Sgt Davies said.

Commissioner for Consumer Protection Anne Driscoll has urged real estate and settlement agents to apply stringent measures to confirm the identity of absentee owners who wish to sell their properties remotely and ensure the person they are dealing with is the legitimate owner.

“It is essential that agents have rigorous procedures and a clear protocol in place to certify that the appropriate person has been identified as the real owner before providing the service,” Ms Driscoll said.

“It is critical that when an owner changes their contact details that real estate agents send a confirmation to both the owner’s original and new addresses, using all forms of communication. This will confirm that the new details are correct and may alert the owner to any improper activity that is occurring.

“The general principles of ‘know your customer’ should apply at all times and the standard 100-point identity check used by banks and other institutions should be used as a minimum when dealing with remote clients. While identity fraud is always a risk, these are important prevention measures.

“Signatures should also be carefully checked against original signatures on file and any major differences should prompt further investigation. Agents should also ask questions about the property that only the true owner would know.

“If agents have any doubts about the authenticity of a document, they should seek to have it independently verified by the issuing authority.

Landgate’s Registrar of Titles Bruce Roberts said he fully supported the increased measures to refine and improve identity verification by all organisations involved in the selling and transfer of property.

When dealing with an absentee owner, whether they are overseas, intrastate or interstate, Consumer Protection advises agents to make further inquiries regarding identity and seek additional evidence whenever:

  1. There has been a recent change in address or other contact detail
  2. Signatures and initials should be carefully checked as they may not closely match
    originals on file
  3. The transaction originates from overseas especially from countries known for scams,
    such as Nigeria
  4. There is a request for funds to be sent to a different bank account normally used by the
    client, or to offshore accounts including China
  5. Sale is urgent as funds are required for investment in a business venture, such as a
    petro-chemical project
  6. New email addresses being used are generic such as hotmail, yahoo or gmail
  7. Communication is not the usual style used by the owner or English may be
    uncharacteristically poor
  8. Witnesses are listed as “Notary Public”, especially if residing in a different country to
    where the owner lives
  9. There is any doubt as to the legitimacy of the person or the documents presented

“If anyone involved in the process remains suspicious about a transaction, they should decline to act any further. Ultimately, these steps are no guarantee against fraudulent conduct, but they will minimise the chances of these types of scams being successfully carried out,” Ms Driscoll said.

“Agents and lenders are reminded they are obliged to provide their services to existing clients with due care and skill under the Australian Consumer Law, for which a range of remedies are available. The Real Estate and Business Agents’ Code of Conduct also makes disciplinary action available to agents who fail to provide services with due care and skill.

“There is no current finding that the agents involved in this latest transaction have failed to act with due care and skill, but it serves as a timely reminder of agents’ obligations.

“Since the last successful scam was reported, an extensive Government and industry education campaign was conducted with the real estate and settlement agents, giving advice on how scams can be avoided.

“There is a need for us to continue this campaign and to implement identification verification procedures as part of standard industry practice. Consumer Protection, Landgate, REIWA and AIC will be working intensely and cooperatively in coming weeks to define additional practices in the industry that need to be put into action to minimise the likelihood of property fraud in the future.

”Consumer Protection will be communicating with all agents immediately, providing as much information and advice as possible to enable them to more readily detect these attempts at fraud.”

END OF RELEASE

Media Contacts:
Consumer Protection - Alan Hynd 9282 0961 or 0429-078791
WA Police – Insp Bill Munnee 9222 1220 or 0408-941534
Landgate – Alison Martyn 9273 7564 or 0407-420255