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Gazumped: Criminals Are Stealing And Selling Australian Homes From Under Their Owners
Topic Started: 25 Aug 2014, 06:11 PM (1,610 Views)
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GAZUMPED: How Criminals Are Stealing And Selling Homes Out From Under Their Owners In Australia

Alex Heber Aug 22 2014, 1:44 PM 19

Owning property has long been the Australian dream and regarded as a pretty safe investment.

But a number of Australians have been hit by criminals who have sold their house through simple identity fraud, then pocketed the profits and disappeared.

Recently a house in the Canberra suburb of Macgregor was offloaded through a South African-based real estate scam without the owner’s knowledge. The owners, who are based overseas, only discovered their investment property had been sold when they contacted their property manager to query why rental money hadn’t been paid. Canberra Police are now investigating a series of exchanges which resulted in the fraud and the disbursement of funds.

“The absence of the home owner and an inability to personally review documentation which may be fraudulent provides leverage for the scammers to operate. Police would urge home owners residing overseas or travelling overseas for a lengthy period to establish robust protocols which protect and confirm their bona fides,” ACT Police said in a statement.

In late July a 46-year-old man was charged with fraud after allegedly falsifying his identity to sell two Gold Coast homes which didn’t belong to him.

Earlier this year NSW Fair Trading Minister Stuart Ayres issued a warning to property owners and real estate agents about scam emails being sent to landlords living overseas.

“The scam email advises agencies of managing landlords to forward forms to them to complete and return to the scammer,” he said.

“The forms require detailed personal information as well as photocopies of passports and mortgage account numbers.”

A run of these types of scams resulted in a group of Western Australian property owners being defrauded of their properties. Earlier this year three people were charged in South Africa over the attempted sale of a $240,000 unit at Perth suburb Mandurah.

Allegedly the trio changed the owner’s contact details and subsequently made a request to sell the property. An offer was received for the property but the scam unravelled when a contract was sent to the rightful owner – luckily by mail, and before deeds or funds had changed hands.

Peter Cutajar, national manager for insurer First Title, told Business Insider: “It may be that the Canberra one will be one of a few, and we might not know about it yet because what they’ve been doing is targeting owners that live overseas.”

Cutajar said there was a real risk in Australia’s property market of scammers stealing their title and selling or mortgaging their property without their knowledge.

“If an organised crime group is going to do some, they do some, they don’t just do one,” he said, adding “most of the property, if not all of them were unencumbered properties.”

He said it all starts with identity fraud. The scammer acquires fake birth certificates, Medicare cards, passports and drivers licences in the home owner’s name. Cutajar said the forms of identification only need to look real because a real estate agent or solicitor are only going to sight the documents.

Discovering your house has been fraudulently sold to an innocent buyer makes recourse complicated and difficult.

“In almost all of the cases it has resulted in litigation,” Cutajar said.

“In some instances they may go against the owner, in some instances they may go against the real estate agent that sold it.

“What they have to do is exhaust litigation and then go to the Torrens title insurance fund.”

But the complexity of the fraud and the number of parties which in most cases are innocently involved – the real estate agent, solicitor, buyer and owner – makes it hard to retrieve the money.

“The money is transferred out of the country within 12, 24 or 36 hours,” Cutajar said.

“Once it hits an offshore account it gets transferred from one account to another.

“Often the settlements are on Friday…if it happens on Friday you’re two or three days ahead before anyone finds out because of time zones and because of the weekend.”

Two ways to defend against it, Cutajar said, are taking out title insurance, and never acting for yourself, but instead instructing a solicitor or conveyancer, and involving a real estate agent.

The New South Wales Office of Fair Trading last year released guidelines for real estate agents outlining ways to spot fraudsters.

Warning signs include recent contact detail changes, international documents from countries “known for scams”, a request for funds to be transferred overseas and offering incentives for a quick sale. There’s more on that here.

After the Canberra real estate fraud the ACT’s Attorney-General Simon Corbell is warning agents to be vigilant.

“These professionals need to exercise due diligence in all transactions. Particularly when dealing with overseas transactions, check if you are in doubt,” he said.

Read more: http://www.businessinsider.com.au/gazumped-how-criminals-are-stealing-and-selling-homes-out-from-under-their-owners-in-australia-2014-8
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Jimbo
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In WA, Landgate requires all parties listed on the deed to have a 100 point ID check carried out at an Australia Post Office prior to signing the transfer of deed. They charge $29 per person and take a photo of you as well. This is then posted directly to the settlement agent.

The real estate agent can accept sale instructions if they have ID'd the seller themselves and offer and acceptance contracts can be signed. However, the deed cannot be transferred without the official 100 point check.

If one or more parties is overseas, they have to attend the nearest Australian High Commission for the 100 point check along with the original contract and sign it in their presence.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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peter fraser
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Jimbo
25 Aug 2014, 08:50 PM
In WA, Landgate requires all parties listed on the deed to have a 100 point ID check carried out at an Australia Post Office prior to signing the transfer of deed. They charge $29 per person and take a photo of you as well. This is then posted directly to the settlement agent.

The real estate agent can accept sale instructions if they have ID'd the seller themselves and offer and acceptance contracts can be signed. However, the deed cannot be transferred without the official 100 point check.

If one or more parties is overseas, they have to attend the nearest Australian High Commission for the 100 point check along with the original contract and sign it in their presence.
SA has a similar system, but not the other states.
I'm quite surprised that solicitors apparently don't have to ID their buyers with 100 points, banks have to.
Any expressed market opinion is my own and is not to be taken as financial advice
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miw
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peter fraser
25 Aug 2014, 09:02 PM
SA has a similar system, but not the other states.
I'm quite surprised that solicitors apparently don't have to ID their buyers with 100 points, banks have to.
I'd say it is because solicitors are not party to the transaction and you don't need one to sell the property. If I was going to be IDed by a solicitor, then I obviously wouldn't use one. I'd show up to the settlement to collect the bank cheque myself.

I wonder how they manage in the country with the Landgate system. Real Australia Post offices are pretty few and far between these days. Maybe you can do it at the cop shop? Not sure how it would protect against fake ID. Do the people inspecting the ID do the training on how to spot a fake passport?

If organised crime are involved, the 100-point ID check is not hard to get past anyone who is not an expert in spotting forged documents.

To my mind the best defence is never to have an unencumbered property. Do not pay off that last 100 bucks on your loan, and make sure the bank you have the loan with has your current contact details. There are far better solutions available in this day and age of PKI as well, and some countries (like China) use them for some things, but Australia does not.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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peter fraser
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miw
25 Aug 2014, 09:42 PM
I'd say it is because solicitors are not party to the transaction and you don't need one to sell the property. If I was going to be IDed by a solicitor, then I obviously wouldn't use one. I'd show up to the settlement to collect the bank cheque myself.

I wonder how they manage in the country with the Landgate system. Real Australia Post offices are pretty few and far between these days. Maybe you can do it at the cop shop? Not sure how it would protect against fake ID. Do the people inspecting the ID do the training on how to spot a fake passport?

If organised crime are involved, the 100-point ID check is not hard to get past anyone who is not an expert in spotting forged documents.

To my mind the best defence is never to have an unencumbered property. Do not pay off that last 100 bucks on your loan, and make sure the bank you have the loan with has your current contact details. There are far better solutions available in this day and age of PKI as well, and some countries (like China) use them for some things, but Australia does not.
If I was going to indulge in property fraud I think that it would be cheaper and better to buy false ID and have a respected solicitor attend to the legal issues for me. The cost of forged ID wouldn't be much in comparison to the value of unencumbered property.

Vendors have to sign the Memorandum of Transfer and that signature must be a qualified witness who will ask for ID.

Better to keep the banks out of it, they tend to verify signatures from specimens on their file. Any discharge authority handed to a bank will certainly be checked. A good forgery is difficult to spot though.
Edited by peter fraser, 25 Aug 2014, 10:07 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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miw
25 Aug 2014, 09:42 PM
I wonder how they manage in the country with the Landgate system. Real Australia Post offices are pretty few and far between these days. Maybe you can do it at the cop shop? Not sure how it would protect against fake ID. Do the people inspecting the ID do the training on how to spot a fake passport?

If the vendor is overseas, they have to travel the nearest High Commission, even if it means flying to another country. I don't know about country sales in WA but I guess it would be pretty strict.

I had to take my passport with me and they cross check it against the passport database which has a copy of your passport photo on it.

I suppose every system can be fiddled but it just makes it that bit harder. Some of the scams though were pretty lame and a bit of due diligence by the RE could have prevented it.

The best one I have heard of was in the UK. People would rent a house and then advertise it for rent themselves. Every applicant would be successful and stump up one months rent as deposit plus one month in advance. They wouldn't realise they had been scammed until 20 couples all turned up on the same day to move in.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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peter fraser
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Jimbo
25 Aug 2014, 10:18 PM
If the vendor is overseas, they have to travel the nearest High Commission, even if it means flying to another country. I don't know about country sales in WA but I guess it would be pretty strict.

I had to take my passport with me and they cross check it against the passport database which has a copy of your passport photo on it.

I suppose every system can be fiddled but it just makes it that bit harder. Some of the scams though were pretty lame and a bit of due diligence by the RE could have prevented it.

The best one I have heard of was in the UK. People would rent a house and then advertise it for rent themselves. Every applicant would be successful and stump up one months rent as deposit plus one month in advance. They wouldn't realise they had been scammed until 20 couples all turned up on the same day to move in.
Some systems were extremely loose. Large companies who regularly remit large sums of money overseas to settle purchase orders used to simply fax the request through to their bank on the company letterhead signed by an authorised signatory. This worked well for a couple of decades.

The banks were taken for millions when they received several fraudulent authorities to remit funds to accounts overseas that were emptied as soon as the funds arrived.

They have new systems now.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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peter fraser
25 Aug 2014, 10:28 PM
Some systems were extremely loose. Large companies who regularly remit large sums of money overseas to settle purchase orders used to simply fax the request through to their bank on the company letterhead signed by an authorised signatory. This worked well for a couple of decades.

The banks were taken for millions when they received several fraudulent authorities to remit funds to accounts overseas that were emptied as soon as the funds arrived.

They have new systems now.
What I found annoying about the ID check, is that I am a personal friend of the settlement agent. I have known her since school.
She is not allowed to use any discretion in the matter. There are no exceptions.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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peter fraser
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Jimbo
25 Aug 2014, 10:36 PM
What I found annoying about the ID check, is that I am a personal friend of the settlement agent. I have known her since school.
She is not allowed to use any discretion in the matter. There are no exceptions.
Well there is either a system or there is no system.
Any expressed market opinion is my own and is not to be taken as financial advice
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miw
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Jimbo
25 Aug 2014, 10:18 PM
I had to take my passport with me and they cross check it against the passport database which has a copy of your passport photo on it.
That would work. I wonder of the Post agencies out in the country have access to that system?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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