Real estate agents not doing enough to prevent identity fraud

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Although 40 per cent of Australian real estate agents (REAs) are concerned about fraudulent activity, only 2.17 per cent use a verification app to confirm they are dealing with the true owner despite tough Verification of Identity (VOI) regulations that can lead to heavy fines, licence cancellation and disqualification.

In an InfoTrack commissioned survey released today, over half of REAs (53.62 per cent) have internal check processes which are followed by all staff and 39.13 per cent use State fair trading guidelines, complying with the Property, Stock and Business Agents Act 2002. 

However, with property fraud on the rise in Australia, and subsequent litigation going against the REA in many cases, agencies are advised to question whether these internal processes are sufficiently robust to ensure REAs are dealing with the rightful owners.

Property fraud, or ‘hi-jacking’, can now involve many different methods at different stages of the sales process, from fake sellers to bogus investment schemes and computer hackers stealing the sales proceeds mid-transfer. REAs are being warned to be vigilant not only with statutory checks but also with their IT security.

“The size of funds transferred in a single transaction makes property scams very attractive to fraudsters,’ warns InfoTrack chief executive, John Ahern. “In most cases the money is unrecoverable and we have seen successful litigation against the real estate agent who sold the property in a number of cases here and in the UK where this type of fraudulent activity has tripled in recent years”.

“This is why we have created Agent.ID for the real estate industry in Queensland and provide other identity verification measures across the country so REAs can be fully compliant with the VOI standard even when the clients are remote, a key concern for verification purposes,” he continued.

In addition, over 40 per cent of real estate agents put final settlements, and commissions, at risk due to lost or incomplete documents.

REAs are advised to:

  • Keep accurate records of owner’s details
  • Refer to records for key details such as matching signatures
  • Confirm the owner’s identity as a first step in the sales process, especially if absentee owners or overseas vendors.
    • Be wary of changes to contact and bank details and unusual requests
  • Keep records of all unusual conversations

For more information, on identity verification, please visit www.infotrack.com.au.

 
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