Identity Verification Standard and Practice

1. Identity Verification Standard and Practice Murray Dolling Assistant Registrar of Titles A/Manager Titles Dealings Section Landgate LSLB/SSSI Seminar Bunbury 25 November 2011

2. Purpose of the Presentation Advise SSSI/SWAGS members about: Statistics and fraud generally Need for a partnership Landgate’s role and recent actions to minimise the risk of title fraud. Latest changes to identity verification for the conveyancing industry.

3. Statistics Transaction levels Currently 240,000 registrations pa (lowest levels in 25 years) Normal market level 340,000 registrations pa Boom period 05/06 486,000 registrations pa Dollar Value of Interests Registered Transfers of land Between $40 and $45 Billion pa Mortgages Between $45 and 50 Billion pa Significant market to attract Fraudsters Fraud is rare in WA 10 year averages are between 1 and zero per year

4. Identity Fraud Three types of identity fraud in Land Dealings: Mortgage Fraud - impersonating registered owner as borrower in giving mortgage to lender Title Fraud - impersonating registered owner as vendor in sale to innocent buyer for value Title & Mortgage Fraud - impersonating registered owner as vendor in sale to self and giving mortgage to lender in own name 4

5. How Often Nationally? Claims Made Mortgage Fraud Claims Resolved 100% 78% CLAIMS PAID 77% Claims Paid Title Fraud 39% Title & Mortgage Fraud 16% 6% Based on consolidated statistics from NSW, Qld and WA for the 10 years to 2010. 1 title fraud in every 350,000 transfers 1 mortgage fraud in every 133,000 mortgages 3.5 mortgage frauds for every title fraud 50% of claims resolved with a payment 5

6. By Whom? - National figures Family 48% Relatives & Friends Advisers 25% 22% Unconnected Persons 5% Based on consolidated statistics from NSW, Qld and WA for the 10 years to 2010. 48%family of the registered owner being impersonated 22%relatives & friends of the registered owner 25%advisers (practitioners, planners, brokers & business associates) to the registered owner 5%persons unconnected to the registered owner 6

7. Take Aways from the Statistics (1) • 70% of fraud is committed by family and friends of the registered owner • 95% of fraud is carried out by persons who are previously known to the registered owner • Dispels the myth that all fraud is committed by strangers.

8. Take Aways from the Statistics (2) Fraud is a family affair Look out for spouses, children, grandchildren, especially son in law, daughter in law In Business - Look out for business partners and co-directors Mortgage fraud is the most common fraud committed.

9. Partnership to reduce Fraud risks Landgate wants to work in partnership with the property industry to reduce the risk of fraud All industry and government has a part to play from the real estate agent to the Lawyer or settlement agent to the banks and finally to Landgate, Department of Commerce and Police. Contact Landgate, Commerce or WAPOL Fraud Squad if you are concerned about an attempted or actual fraud.

10. Partnership benefits The Partnership to reduce fraud risks is important because of 2 main benefits: Protects your clients interests; and Supports security of title and maintains public confidence in the Torrens Title system.

11. Landgate’s Role Working jointly with Commerce REIWA, AICWA and WAPOL on Fraud. Five pronged approach. Landgate at end of the sale process after the fraud has occurred and after the money has gone. Torrens title system provides immediate indefeasibility and Certainty of Title.

12. Landgate’s recent actions • Caveat (Improper Dealings) • Overseas witnessing • Extra scrutiny of documents signed overseas • Review of overseas signed transfers

13. Background Two recent alleged property frauds Identity theft, forged documents Identity verification at time of listing Identity verification before settlement

14. Copycat Fraud in WA Only a matter of time before a copycat fraud occurs with a transfer that is signed within WA

15. New Identity Verification Standard Involves all transfers not just those signed overseas Visual Identity Verification of all Sellers Done when the transfer is signed

16. Who must be identified? The Identity Verification Standard must be applied to: The seller(s) not the buyer; The sellers representative e.g. attorney/executor signing on behalf of the seller/owner Each person signing and/or affixing a seal on behalf of an incorporated body (Company/Incorporated Association) named as transferor.

17. Identity Document Production • Transferor must produce to the Identifier original identity documents • At least one of the original identity documents sighted must include a photograph and a signature.

18. Visual Identity Verification • Person whose identity is being verified is to present themselves to the Identifier • Identifier is to satisfy themselves that the person is of the same appearance. • Compare signatures on documents

19. Who can do identity verification? • Within Australia • Outside Australia

20. When must identity verification occur? • Every transfer • At time of execution

21. Summary (1) Frauds are rare in WA but they have a devastating effect on the owner Remember we cannot prevent all frauds but…Early detection is key…….. Partnership between Government and Industry will reduce fraud risks by more rigorous client identification practices at the: Beginning of the transaction when first instructed to sell by properly identifying your client; Middle of the transaction when the transfer is signed by identifying; End of the transactions when documents are lodged at Landgate.

22. Summary (2) Why? Because it Protects your clients interests; Supports security of title and maintains public confidence in the Torrens Title system. Maintains the property industry as a whole Maintains your bottom line

23. The end; any questions ? ?