The Rise of Fake ID Documents and Associated Fraud
It is estimated that property fraud and fake ID documents have cost the UK Land Registry more than £73million over the past 18 years, with an average pay-out to a victim costing upwards of £100,000.
Property fraud and fake ID documents are on the rise, with more onus being put on solicitors involved in property transactions to ensure that the client is who they say they are.
Criminals will use a variety of methods to complete property fraud, such as:
- Obtaining a fake ID such as a passport or driving licence
- Or changing their name by deed poll to the real property owner’s name and obtaining genuine documents and opening bank accounts
Changing her name by deed poll, opening two new bank accounts and convincing the solicitors in charge of the transaction that the house was indeed hers, enabled her to pocket £75,000.
If the real owner hadn’t decided to sell the property herself a few months later, the fraud may not have been picked up quickly.
But who are those most at risk of falling foul of this type of fraud?
According to The Law Society and HM Land Registry, the property owners most at risk of being targeted for this type of fraud include:
- Sole and long-established owners (especially of unmortgaged properties)
- Couples who have split up acrimoniously
- Absent landlords or those who live overseas
- People living in a care home or hospital
- Deceased property owners
Solicitors involved in property transactions are familiar with the idea of obtaining and checking identity documents from clients who instruct them. With passports and or driving licences proving to be the best and preferred form of identification.
However, advances in technology mean that forgeries can now be so realistic it is virtually impossible to tell that they are not real by manually checking. But it’s not only passports and driving licences that are getting forged. Bank statements, utility bills, credit reports, payslips and other documents that can be used to prove a client’s source of funds are also readily available for criminals to exploit.
What warning signs should I see if I suspect a fraudulent transaction?
Criminals will do their upmost to hide their true intentions from you, but the signs you should be aware of include:
- If the clients are secretive
- If there are high-value cash transactions involved
- If a third party is involved in the transaction or acting on behalf of the ‘seller’
What tools are available to help with identity checks?
One of the best tools, a law firm has to protect itself against criminals is its staff. Ensuring all of the staff are regularly trained on how to verify ID and to notice the warning signs is the first step – especially if clients are adamant, they want to come and provide their ID documentation face to face.
The document ‘Recognising Fraudulent Identity Documents’ is the Government guidelines when it comes to examining identity documents.
However, technology can help in the battle against cyber criminals, looking to make a quick buck from property transaction fraud. There are now pieces of software that can take away the burden and pressure of ensuring an ID document you’ve received is legitimate.
The advantages of using technology to check if the client is who they say they are is:
- The software is driven by artificial intelligence to scan the ID and facial technology ensures the ID document matches the person’s photo – and the photo itself isn’t a fake
- Easy for the client – they no longer need to come into the office to provide their original documents or certified copies. They can prove their identity from the comfort of their own home.
- Due to the technology used in the software, it’s extremely difficult for fraudsters to be able to spoof the system and get away with fraud
Source of funds – let technology remove the risk
We are delighted to announce our most recent partnership with next generation ID and source of funds verification tool Thirdfort. Thirdfort combines facial recognition technology with document scanning and open banking, enabling you to confidently “Know Your Customer.”
Kindly shared by Lawyer Checker