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Real estate scams: agents told to conduct more stringent ID checks


Natasha Boddy

Real estate agents are being warned to be on high alert for property scams.

Real estate agents are being warned to be on high alert for property scams.

Real estate agents in Canberra are being told to conduct 100 point identification checks and pre-establish security questions with property owners in a bid to thwart future property scams. 

The ACT real estate industry has been sent a property fraud prevention fact sheet after it emerged a Canberra property had been sold without the owner's knowledge while she was living in South Africa. 

ACT Police are now investigating the suspected fraudulent sale of a Macgregor house which is believed to be the first property scam to hit the territory.

The Office of Regulatory Services (ORS) document will be distributed by the Real Estate Institute of the ACT to its members and warns of the need for vigilance to ensure agents verify who they are dealing with. 

Although the advice makes mention of property scams in Western Australia, it does not mention the ACT case which is believed to have occured in recent months. 

The advice warns agents to be suspicious of instances where there may have been a recent change of address or contact details close to a request to sell a property as well as requests for future correspondence to be done through a new email address or phone number.

They should also be wary when new email addresses are generic ones such as from Hotmail, Yahoo or Gmail, or if there are requests for funds to be sent to a different bank account. 

Other warning signs include transactions involving people or documents issued overseas or that a sale is urgent.

Agents are also warned that scammers might try to persuade them that if the sale is successful or quick, they will receive future work or other incentives. 

The ORS has also advised agents to conduct a minimum 100-point identity check. The checks should be done face-to-face where possible or in cases where the seller might be overseas, they should have documents sighted at an Australian embassy.

Agents are also advised to verify the seller's identity with original documents as well as legal ownership of the property from an original or certified copy of a primary ownership document, such as a property titles, current rates or land tax notice. 

If there are any doubts about documents, agents should verify them with the issuing authority. 

Property owners are also being advised to regularly check their property managers have their current and correct contact details, set up a password or secret question with their agent and ensure the agent has a process to verify requests to change contact details by sending notifications to both the old and new addresses, including electronic and physical. 

Real Estate Institute of the ACT chief executive Ron Bell said the advice from ORS was comprehensive and had been developed with the assistances of authorities in WA. 

"I understand they've been assisted by the WA people over the difficulties they've had and what's happened to them," he said. 

"It provides excellent information for not only our industry but for vendors and for people who have investment properties."

Mr Bell said much of the advice could be implemented by the industry relatively easily. 

"They've got to be vigilant - you can normally smell something when it's going wrong. If somebody is trying to sell or buy something from overseas, I think the flags have got to go up and I think they've got to ask a lot more questions," he said. 

7 comments so far

  • Shameful that RE agents have no obligations when transacting the sale of major assets. I'm sure I would have great difficulty selling my neighbours car from their driveway, but no such protection exists for homeowners !
    And the RE agent gets to keep their commission on a fraudulent sale?? What a pitiful lack of consumer protection.

    Date and time
    July 25, 2014, 8:00AM
    • I was thinking if this would be possible with a car.
      Imagine my neighbour goes on holiday and asks me to look after his car. He leaves the keys and rego papers with me.
      Sometime later I get an email from my neighbour (actually a person purporting to be my neighbour) saying he needs extra funds to extend his holiday and has decided to sell the car. He asks if I can sell the car on his behalf, promising a % of the sale for my troubles. He tells me he can’t be contacted by phone and has a new email address while travelling.
      I don’t know the neighbour all that well, but as he has entrusted the car to my care, I want to do the right thing by him. I am a little uncomfortable doing this but after a few email exchanges I decide its ok.
      So I advertise the car, someone comes and takes the car for a test drive and makes an offer.
      I email the offer to the owner. He says sell and emails me a scanned signed copy of the rego papers and provides his bank account details to transfer the funds, less my commission and expenses.
      Could it be this easy? And who is liable when the real neighbour returns and ask where his car is?
      I hope someone here can show how this scenario could not happen.

      Date and time
      July 25, 2014, 2:49PM
  • Why is there no mention of the lawyers representing the seller having to verify the identity of the seller and their title to the property?

    Date and time
    July 25, 2014, 8:31AM
    • The lawyers would have only checked the names against those on the land title and other ownership & rates notices, if they all match who's to know?
      Sounds like the real-estate institute & the O.R.S have got the situation under control with the guidelines they have come up with, the other safeguard is to have a mortgage over your property, then the scammers & their lawyers will have to deal with the bank as well, the title will have registered interests on it or even the property owner could register a caveat on their own property if they were concerned enough.
      The use of a security password for genuine owners for dealing with the managing agency would be enough to tip-off agents something was amiss & thwart most scammers.

      Date and time
      July 25, 2014, 10:03AM
      • I would have thought that's the duty of ummmm know those highly educated, eloquently spoken, well documentation skills of lawyers.

        Date and time
        July 25, 2014, 10:47AM
        • Please don't tell me the proceeds of the sale went into a Western Union transfer. One does wonder... That alone should've been a reason to ask questions. If it was a Western Union scam then we really need to ask about the judgement of the so called professionals (read - agents) that we pay top dollar for to look after our interests...

          All heads involved should be liable....

          Date and time
          July 25, 2014, 1:05PM
          • Property owners must also ensure that their mail is re-directed to them at the post office with a 100 point I.D check and mail with all their personal details & goings on is not being delivered to the rental property for the entire time they are away.
            I would imagine it would not be hard for some-one with the inclination to assume ones identity and re-direct mail or change details given the amount of information on some pieces of paper sent through the mail.
            It's also important to shred and properly dispose of all not needed documents with personal information no matter how seemingly un-important they are as they can be used by others to create an identity in your name should they fall into the wrong hands.

            Date and time
            July 25, 2014, 1:53PM

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