A warning issued by the by the Law Society of New South Wales.
The Law Society of New South Wales has received advice from the Registrar General that LPI Sydney has again intercepted counterfeit Certificates of Title lodged with mortgage documentation.
The counterfeit title is an accurate representation of the form used prior to the new form of Certificate introduced in January 2004.
It is extremely difficult to identify the counterfeit without careful examination and a good knowledge of the appearance, and detailed format, of a genuine Certificate of Title.
If any doubt exists as to the genuineness of a Certificate of Title, enquiry should be made at LPI Sydney before accepting the Certificate as a genuine document. Practitioners can request LPI Sydney to confirm the status of a Certificate of Title.
High risk transactions include:
- Where a client previously unknown or not personally known to the solicitor obtains a mortgage loan from a lender (invariably with the apparent assistance or intervention of a broker) using an unencumbered Certificate of Title as security.
- Where a valuable piece of unencumbered land is given as security for a loan upon which a high rate of interest is payable.
- Where on settlement the purported mortgagor refuses to attend personally or where none of the principal sum is paid to the mortgagor on settlement.
The profession is again warned to use extreme care to ensure, as much as possible, the true identity of their ‘new clients’.
The Fraud Squad has warned of the extraordinary and widespread increase in ‘identification fraud’, where whole, well-documented identities are acquired by fraudsters. Forged passports, drivers licences, credit cards, letterheads etc are all available to fraudsters.
It is not unusual for fraudsters to have an excellent working knowledge of conveyancing procedures, and to falsely sign documents as a solicitor, justice of the peace or otherwise. Solicitors have been induced to improperly witness documents signed by persons who were not present -‘ill at home’, ‘in hospital’, ‘overseas’, and ‘has an intense dislike of attending a lawyers’ office’ are but some explanations which may seem plausible at the time.
Put simply, if a client has not been known to you personally for some time or the signature to be witnessed was not given in your presence, do, not act as the witness. Think carefully about the wisdom of acting on behalf of a mortgagor whom you have never personally met or with whose directors you are not personally acquainted.
As the fraudulent activities have, to date, invariably related to unencumbered properties, it has been again suggested that mortgagees obtain a photocopy of the front and back of the mortgagor’s title document prior to settlement and have it confirmed as authentic by the LPI Sydney, or alternatively, settlement could be effected at the LPI Sydney, where the original Certificate of Title can be viewed by an experienced Officer of that department.
The Law Society recommends that, in addition to retaining a clear copy of all documents used in the identification process, practitioners ensure that at least one such document displays both a good quality photo and the signature of the person so identified.