Showing posts tagged with: Fraud
Fraud Prevention Tips
15Nov
Fraud claims and tips to prevent fraud
Fraud

Fraud claims and tips to prevent fraud

 

Chicago Title takes fraud seriously, and as your partners in the fight against fraud, below are some fraud claims that we have received in the past and some helpful tips to prevent fraud. 

The client was out of $200,000 when a firm’s email account was hacked, and it acted on a fraudulent request to redirect funds!

We strongly recommend that you:

  • Check email addresses on all material correspondence and match to the exact trusted email given in the client’s onboarding.
  • DO NOT accept an email to re-direct funds without the Law firm first making a call to a trusted phone number for the borrower.
  • Get verbal confirmation of specific details for the redirection of funds and ensure your lender is on side.

A lady refinanced her sister’s house for $250,000, and the money was lost! It turned out to be a case of identity theft!

  • A simple check of a government-issued ID is not enough to keep yourself from being embroiled in a fraud case.
  • Before investing your precious time in a file for a non-client, authenticate their identity with Chicago Title’s Identity Verification Service.

An innocent business owner is embroiled in a $1,500,000 mortgage fraud. The law firm is under investigation for its business practices as fraudsters preyed on the firm’s lack of attention to detail and weak security measures.

We strongly recommend that you:

  • Change your password monthly.
  • Utilize two-step authentication services for an extra layer of protection.

Over a million dollars gone in a fraudulent sale!  How confident are you in handing over a million dollars to a non-client who has come to you to act on the sale of their home, which is mortgage free? The cost of being drawn into a fraud is your time and self-confidence.

We strongly recommend that you:

  • Do not trust someone just because your client refers them to you.
  • Use Chicago Title’s ID verification service when acting for a non-client.

A firm redirected $700,000 into a fraudster’s account instead of the homeowner’s account because of a phishing attack. The law clerk clicked on an email link which download spyware onto the firm’s computer. 

We strongly recommend that you:

  • Check your junk mail daily and investigate why items are there.
  • Use two-step authentication to improve your security.
  • Verify the sender’s email address and do not click on links or attachments in unsolicited emails.

Additional Useful resources:

Read More
Chicago Title paid $2.5M Insurance claim for corporate fraud
31Aug
Chicago Title Paid $2.5M Insurance Claim for Corporate Fraud
Claims

Chicago Title Paid $2.5M Insurance Claim for Corporate Fraud

 

In late 2020, an Ontario numbered corporation realized they had been a victim of corporate fraud when they discovered a private mortgage worth $2,500,000 was registered on the title of their commercial property and received a registered mail notice saying that their payments were in arrears.

Unbeknownst to the true corporate owner, a fraudster hi-jacked the corporation’s identity changing the records to show an innocent third party was the company’s sole director. The fraudster arranged for an equity take-out with a private lender. An innocent third party’s valid driver’s license and social insurance card were presented to the lender as identification. Note that a social insurance card is not an acceptable ID in a loan transaction. These pieces of identification contained the innocent’s true information, but the fraudster’s driver’s license photo was that of the driver. The police confirmed that the third person was not involved but declared a victim of identity theft.

The insured mortgage was found fraudulent and deleted from Title by the courts. Chicago Title paid the private lender’s claim of $2,500,000 plus legal fees, and the fraudster absconded with the funds. Since this claim, Chicago Title has tightened underwriting requirements, including a mandatory biometric identity authentication process, and is lobbying the government to increase the security in making changes in corporate records.

Read More
Mortgage Fraud: Fake Power of Attorney_CTIC
17May
Mortgage Fraud: Fake Power of Attorney
Claims

Mortgage Fraud: Fake Power of Attorney

 

Fake Powers of Attorney (POA) have been linked to many fraud claims. Be on guard if your client asks you to close using a Power of Attorney.  Here is the story of Julian, a private lender, who was a victim of a similar fraud.

Susan* made her husband, Robert*, a Donor in a Power of Attorney (POA) when they decided to purchase a house. A few years later, the relationship ended and Robert moved out. He used the old Power of Attorney which was expired and altered it to make it appear valid in order to get a mortgage on his wife’s house. Robert approached Julian*, a private lender, to get the mortgage with this fake Power of Attorney and didn’t disclose the fact that he was not living with his wife anymore. Julian believed him and issued the mortgage without consulting with Susan. When he learned that the mortgage was issued without Susan’s knowledge or consent, he knew he had been a victim of fraud, so he contacted Chicago Title. While the case is still under litigation, Julian is happy he has a Lender’s policy with Chicago Title to cover his losses.

At Chicago Title we understand that your house is not just a house; it is your most important asset; it is where you build your dreams and create priceless memories, and it needs to be protected. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from fraud and title defects.

* Names and identifying details have been changed to protect the identity of the involved parties

Read More
Avoiding Fraud During the Pandemic
10Jun
Avoiding Fraud During the Pandemic
Residential

Avoiding Fraud During the Pandemic

 

In times of uncertainty, we know from experience that fraudsters ramp up their activities. In these uncertain times of COVID-19, we need to increase our vigilance.

Some firms use the driver’s license validation service offered by the Ministry of Transportation. We need to be careful not to take too much confidence in the outcome. The MTO search lets you know that you have a valid driver’s license number. It does not tell you who that person is.

When falsifying a driver’s license, fraudsters may redress just the front of the driver’s license and leave the back of the license unchanged. Compare information on both sides of the driver’s license. Make sure the information on the back of the license matches the front. In Ontario, for example, a unique identifier number is printed on the front, and that same number is on the back of the driver’s license.

With many law firms overseeing the signing of documents through virtual means, these transactions are deemed to be high risk. Governing bodies tell us to take extra steps but may fall short of telling us what those steps would be. One option available to you is Chicago Title’s ID verification service.

ID Verification Service will check the identity of the client (purchaser, borrower) against a variety of data sources to help validate the identity of the person. The knowledge-based authentication process uses information that should only be known by the client.

Let’s work together to reduce identity fraud and add an additional level of security to your real estate transactions.

Contact your Regional Manager for more information.

Read More
Peace of mind with a suitable Title Insurance Policy
12Mar
Peace of mind with a suitable Title Insurance Policy
Residential

Peace of mind with a suitable Title Insurance Policy

 

Title insurance is the cheapest and best insurance you will ever buy. Period. Seriously. Okay, I know that I am biased given I work for Chicago Title Insurance Company Canada, but a big part of why I work here is that I believe in the product. I know all of the arguments about insurance and how expensive it is and when one tries to make a claim, there are issues. I get it. The industry doesn’t have the best reputation – although, on that front I have to tell you the last two times I dealt with other insurance companies (Car accident and Life insurance policy – not mine thankfully), the service and speed was stellar. In any event, Title insurance is different. Title insurance is the cheapest insurance you will ever buy because it is a 1 TIME PREMIUM. That’s right. You pay the premium, which across Canada the average premium is $400 for a homeowner (GTA is higher because values are much higher). One only pays that premium once to cover the entire life of a mortgage (which includes any assignments to another lender) or the length of time one owns the property. So, if one buys a house today and owns it for 50 years, the coverage will still apply. Luckily for title insurance companies, Canadians on average own their homes around 5 years, so we actually get to insure properties more than once.

So, what is title insurance policy and what does it cover? Title insurance covers a homeowner for a myraid of issues relating to a property that home insurance can’t cover for and that a lawyer/clerk/notary can’t protect a homeowner from. It covers matters such as fraud and forgery, survey issues, zoning, work orders and permit issues where the municipality forces a homeowner to fix such problems. It covers the policyholder if there are any actual challenges to the “title” or ownership of your property (or the validity of a mortgage on the property in case of a lender policy) but it goes well beyond that to cover many other issues. So, what happens if a client buys a house and their neighbor subsequently complains that the client’s garage is 3 feet on to her property? Well, title insurance looks at the issue, tries to get the neighbor to be reasonable and settle but if she refuses and wants to be “that” nasty neighbor we always hear about, the title insurer will pay to have the garage moved or the offending portion moved off of the neighbor’s property. Title insurers see all sorts of claims around building permits, unpaid taxes, construction liens, and sadly and rapidly increasing fraud and forgery where someone fraudulently discharges and/or places a new mortgage on title to a property they don’t own. This causes a total mess for the homeowners and the lenders involved and sorting out the mess can be very costly. The beauty of title insurance, in this scenario, is that the title insurer pays the legal fees to sort it out and if the lender ultimately loses priority or the validity of its mortgage or property, title insurer pays the homeowner or the lender the loss without deducting the legal fees incurred to remedy the situation.

While no one loves insurance, as one pays for it and usually don’t need it, its value is often appreciated when there is possibility of a material loss, but the homeowner doesn’t have the right insurance in place. Title insurance is such a simple, inexpensive and invaluable insurance to have that any mortgage professional can categorically and without hesitation recommend it to a homeowner for protection against perils described above and for peace of mind.

Written by John Rider, Senior Vice President, Retail and Commercial Title Insurance, Chicago Title Insurance Company Canada policy

Published by Private Matters Today. Click here to read the published article on Private Matters.

Read More
Fraud Discussion
08Jul
Don’t stop the discussions around fraud
Residential

Don’t stop the discussions around fraud

 

March being the Fraud Prevention Month, always contains a flurry of social media postings of articles and stories around Fraud. It is an excellent way for us to know what fraudsters are doing out in the market and be aware of ways to prevent ourselves from defraud. But with the end of March, it doesn’t mean we can put away our worries for another year. Fraud Prevention Month ends in March, not Fraud. The fraudsters are out there year round and getting increasingly sophisticated in their frauds. It is imperative that we remain vigilant year-round.

Title insurance is essential but is not a complete answer

Title insurance is one excellent way to protect yourself against fraud. While there isn’t coverage for financial fraud, fraud against title or impersonation of a borrower is covered. However, when someone pretending to be the owner of a property and is able to get access (often because there is a renter, there is construction going on at the property or long absences of the homeowner) lenders can be duped – Title insurance is not a complete answer.

You can’t be willfully blind to the information that you are getting from your borrowers to ensure that they are who they say they are. Your lawyer or notary needs to be checking IDs carefully to ensure it is legitimate and you as a lender need to be asking questions and doing credit checks to ensure the person who says they are the owner knows the information that the true owner of the property knows. Companies like Equifax and TransUnion have services that can ask questions of your borrower to ensure they know bank accounts, credit card and other information about the true owner. If they can’t answer those basic questions, you don’t want to lend to them, with or without Title insurance. Nowadays, Title insurance companies are now doing checks on some of these borrowers and I believe there should be increasing checks that you and we should be conducting.

Fraud is on the rise, and you need to be cautious

US Title insurance companies are seeing rapidly increasing amounts of frauds being perpetrated. Increasingly, fraudsters are taking control of lawyers, lenders, borrowers emails and redirecting funds. They are getting real ID from provincial agencies by producing information about the owner, at some level, even these checks against IDs are not foolproof. We don’t need to become paranoid and freeze up the whole market but we need to be aware and if it smells foul, there is probably something wrong with the deal. You need to run from it or at least do more due diligence before signing over those funds.

With or without title insurance no one wants or needs to be embroiled in a fraud mess trying to prove what information all parties had or provided and who these people truly were. While Spring brings the hope of sun, flowers and being outdoors for a change, don’t take your eyes off the game. We can work together and beat these criminals; we just need to work together as a team to do so.

Read More
Identity Theft: A Homeowner’s Nightmare
11Jan
Identity Theft: A Homeowner’s Nightmare
Residential

Identity Theft: A Homeowner’s Nightmare

 

When Ayako got the first call from the bank, she thought it was a prank. They were threatening to take her home if she didn’t make her mortgage payments. But she had lived there for over 10 years, and had been making all her payments on time. After several more calls, she decided to investigate.

She discovered to her horror, a second mortgage on her home she had never taken out. A thief had stolen her identity and put a $320,000 mortgage on her home, made payments for a year and then stopped. By the time Ayako put everything together, the bank had already served her a foreclosure suit.

But Ayako’s lawyer had recommended CTIC’s title insurance when she had bought her house. We paid the legal fees, had the bank dismiss the lawsuit and had them remove the fraudulent mortgage from Ayako’s house. Luckily for the bank, they had title insurance too, so they recovered their losses as well.

Nightmare stories like Ayako’s come up every year, but they only have happy endings with the security title insurance provides. Thanks to her lawyer’s understanding of that protection, it was a nightmare she was able to wake up from.

Read More
Protecting the Elderly from Financial Fraud
24Sep
Protecting the Elderly from Financial Fraud
Residential

Protecting the Elderly from Financial Fraud

 

Jack came to Faye’s law office looking to refinance his elderly father’s mortgage. When Faye asked him further, Jack presented a homemade power of attourney naming himself as his father’s representative. Suspicious, Faye contacted Jack’s father, who said he was confused, or just deferred questions to Jack. But when she asked him if he understood his son was taking out a loan against his house and he answered “No,” Faye refused to act in the transaction.

Real estate lawyers play a real part in protecting the elderly from being taken advantage of, even by their own families. Consider these best practices at your law practice:

  • Never lose sight of who you represent. If your client’s child or even spouse does all the talking, politely ask them to step out for a moment. Your client may feel more empowered to speak up one-to-one.
  • Bring your own translator. Be wary of family or caregivers translating for your elderly client. Have at least one meeting with a third-party translator to make sure your client can really understand and consent.
  • Verify power of attourney. Never take documents at face value and always make sure the power of attourney is valid and not being abused.
Read More