Real Estate Frauds (continued)

Tip on Fighting Identity Fraud

There are some things that you can do to help fight identity fraud. 
  • Get picture identification from all property owners and keep a copy of the identification in your file (front and back, if applicable).  Note your obligations under the Rules on Client Identification.
  • Be wary of powers of attorney or deals that must be closed urgently.
  • As in value fraud situations, if financing is involved be sure to follow the provisions of the Code of Conduct as they relate to acting for the borrower and the lender. Advise the lender of any odd circumstances surrounding the mortgage loan and get further instructions from the lender documented in writing before proceeding with any advance.
  • Take steps to protect against corporate identity fraud (i.e., a fraudster posing as an authorized signatory):
    • obtain your own corporate search; do not rely on the client's copy;
    • obtain picture identification just as you would for an individual signing on their own behalf, (see the Rules on Client Identification); and
    • satisfy yourself that proper corporate authority is given to the signatory and that any requirements in the bylaws regarding multiple signatures are met.
At any time (unless you believe you need your own counsel), you may contact the Law Society to explain the nature of the problem and ask to be directed to the staff lawyer most able to assist.  Remember that you owe a duty of confidentiality to your client.  However, note rules 3.3-3 A and 3.3-3B of the Code of Conduct which permit you to disclose confidential information if you believe on reasonable grounds that there is a risk of death or bodily harm or risk of substantial financial injury to an individual and that disclosure is necessary to prevent the death, harm or financial injury.
In all situations where you believe your client is instructing you to assist him or her with a situation that smells of fraud, withdraw your services before you are led too far into the situation, and obtain assistance from another lawyer with withdrawal, as necessary.