Iowa Title Guaranty Webinar with LandLock™ |
Seller Impersonation Fraud: |
What is it? How can we prevent it? |
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Unfortunately, fraud is prevalent in the title industry. For the past few years, our main focus has been on wire fraud. While we still must be vigilant about wire fraud, there is another type of fraud that is on the rise - seller impersonation fraud a/k/a “owner impersonation fraud”, “title theft” and “title pirating”.
Seller impersonation fraud has been growing steadily in recent years, undoubtedly because of the dramatic rise in identity theft. Below is information about seller impersonation fraud and how to avoid it.
ITG is hosting a webinar on Wednesday, April 30 at 12:00 p.m. with LandLock™, a new vendor to the title industry with a unique product that helps prevent seller impersonation fraud* before it occurs. The webinar will introduce ITG participants to LandLock™ and give to LandLock™ the opportunity to show off their innovative product.
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What is seller impersonation fraud? |
Seller impersonation fraud is where someone acts as the owner of a property, lists the property for sale (often with a legitimate listing agent), and ultimately sells the property to a legitimate buyer (without the property owner’s knowledge or consent), only for that buyer to later discover that the person from whom the buyer purchased the property was not the owner of the property. Seller/owner impersonation fraud includes mortgaging a property from an unsuspecting lender (without the property’s owner’s knowledge or consent) and renting / leasing the property to an unsuspecting tenant (without the property owner’s knowledge or consent).
Although, seller impersonation fraud often happens under common scenarios (i.e., the property is a vacant lot, vacant house or building, a seasonal home or a vacation home with no outstanding mortgage against the property), seller impersonation fraud can and does occur with respect to occupied properties and mortgaged properties. Often the owner of the property is a corporation, trust, limited liability company, or entity.
How can we prevent seller/owner impersonation fraud? Whether or not the common scenarios are present, you should take a few simple steps to prevent seller/owner impersonation fraud from succeeding:
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Demand an in-person closing. More often than not, the fraudulent seller will only communicate with agents through text messages or emails and will not be available to do an in-person closing.
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Require Remote Online Notarization. An in-person closing is not always practical, even for legitimate sellers. In these instances, utilize RON to ensure that the seller is undergoing some form of identity verification before and/or during settlement / closing and signing the documents while being recorded.
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Send a letter to the address listed on the County Assessor’s website. At the beginning of the transaction, if the common scenarios are present, send a letter to the property owner’s mailing address shown on the County Assessor’s website. The letter should introduce yourself, have a brief description of your role in the transaction, and ask the property owner to notify you upon receipt.
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Use identification technology. There are many different technology vendors in the title world that can help verify a property owner’s identity. You can use software to help identify the person who claims to be the property owner, who will have to provide a current picture and his/her government-issued ID. ITG has options available for identification verification. Please do not hesitate to reach out!
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Use LandLock™. LandLock’s patent-pending product helps prevent seller impersonation fraud before the theft occurs. LandLock™ verifies a property owner’s identity using his/her government-issued ID, biometrics and other identifying characteristics and subtly attaches to the property his/her identifying characteristics via a recorded document. The recorded document provides notice to interested parties (i.e., listing agents, real estate brokers, buyers, mortgagees, tenants, title agents and title insurers) that they should not be transacting business with the person claiming to be the property owner unless and until such person obtains proof of identity from LandLock™. Only the property owner (i.e., the person who created an account with LandLock™) can obtain proof of his/her identity from LandLock™. When used properly, LandLock™ obviates the need for the cautionary measures described in the bulleted list above.
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*ITG does not endorse, recommend, require, or guaranty the product offerings by LandLock™. In an effort to educate ITG participants and provide vendors opportunities to interact with ITG participants, ITG is facilitating this webinar. The facilitation of this webinar is purely informational and should not be understood to be anything other than information.
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