Title Fraud

Do I rightly or wrongly sense a general fear amongst legal practitioners that when the duplicate Certificate of Title is eliminated under the EC regime, title fraud will make a sudden unwelcome appearance, as if it doesn't exist now?

I dont know the statistics on title fraud, but I do know it does exist today. Because there is a Duplicate Title, title fraud is here, it does occur and it is very hard to eliminate. Perhaps title fraud can be reduced by eliminating the CT with better safeguards and procedures in place? Pehaps someone can illuminate us on the current incidence of title fraud in Australia.

How hard is it, to forge the signature of the true owner to transfer the deed to himself? Or forge the signature of a bank official for that matter to discharge a mortgage? To obtain a replacement duplicate of title? To remortgage the title which is the most common title fraud?

Land Registry Victoria collect approximately $1000 for every transfer and $75 for every mortgage and discharge. Perhaps to alleviate fear, a percentage of fees paid can be placed into an indemnity fund. Or possibly in future there is a compulsory levy on every transaction so every property owner is covered by title insurance.

New regulations will require a tighter regime on identifying borrowers are the rightful owner of the security especially when executing the mortgage.

But we live in a fool's paradise if we think title fraud cant or wont happen simply because we have duplicate CTs.



Land title fraud - NSW Law Society Bulletin

In recent Caveats the Law Society has warned the profession about two types of land title fraud which have become apparent over recent times.

The first is the application for issue of new certificates of title by fraudsters pretending to be the registered proprietors. The fraudsters then borrow money against the property, thus seeking to give the innocent mortgagee title propriety over the innocent registered proprietor.

The second fraud relates to forged certificates of title. The forged certificates of title are of varied quality, and a number have apparently been registered.

In regard to the forged certificate of title, Land and Property Information NSW (LPI) is arranging for a much more secure form of certificate, which will include paper with a watermark, secure management of blank documents, foil crests, and individual numbering. These steps should prevent all but the most sophisticated forgeries.

In the meantime, solicitors should consider having certificates of title authenticated by the LPI before certifying title, particularly in matters where there is a refinance on otherwise unencumbered properties (although this is not the only indicator), or better still arrange to have the title deed produced at the LPI.

As to the fraudulent issue of certificates of title, practitioners should avoid witnessing any document unless they personally know the person to whose signature they attest. Solicitors need to be aware that fraudsters are able to obtain a false identity with the use of passports, driver’s licences and birth certificates. If a solicitor chooses to witness a document for a transfer of mortgage or other title documents, the solicitor should be very careful, and at least make copies of the documents upon which certification is relied.

If there is to be a refinance on unencumbered property, it may be worthwhile delaying payment pending registration of the dealings.

April 2003

Identity Fraud - 13 arrested in probe

The Age reports 12 July 2006

ONE of Australia's largest identity fraud syndicates has been smashed after allegedly stealing mail and corrupting bank employees to scam tens of millions of dollars from unsuspecting victims, police say.

Bogus NSW drivers' licences, Medicare cards and Australian passports have been intercepted by investigators, who say they were among the most sophisticated ever seized in Australia.

The gang's alleged mastermind, Oliver Yu, 22, from the northern Sydney suburb of Gordon, is among 13 people arrested in the past two months by the Identity Crime Task Force (ICTF) after a 12-month surveillance operation.

Nine men and one woman, aged 20 to 41, have been charged with 230 offences, and police have deported two Malaysian nationals and released one man pending further inquiries.

The syndicate is believed responsible for the theft of tens of millions of dollars, but police say they may never know the true extent of the gang's crimes.

The ring, recruited "runners" to steal personal information from unsuspecting victims, were specialists in stealing mail, credit card fraud or personal loans. The syndicate, which allegedly operated in NSW, Queensland, Victoria and probably WA and which had links to South-East Asia, allegedly used the identity of individuals and multinational companies, and also created false identities, to steal money from banks.

NSW Police Online - 'It has been alleged that people within the syndicate assumed the identity of individuals and companies as well as created false identities which were allegedly used to obtain money from a number of financial institutions.'

These gangs have specialists who produce the fake ID and documentation and others who execute the fraud. The take is then split amongst the participants paying commissions not unlike any other legitimate business.

Who bears the Loss?

1. The financial institution who has lent the money to the fraudsters. But more than likely they will hold a registered first mortgage


2. The real owner of the property whose property is encumbered and may have even lost their status as a registered proprietor through a fraudulent transfer


3. The land registry - through a claim on the indemnity fund


4. Legal Practitioners and their professional indemnity funds for their unwitting participation

Like all fiascos these things often play themselves out in the Courts.

As you can see – the duplicate CT provides scant protection when we are facing determined gangs of fraudsters of increasing sophistication in identity and document fraud.