The crime of identity theft is a serious offense that can have dire consequences for victims. However, when it happens during a real estate transaction, it becomes even more alarming because a person’s home is at risk, and the amount of money involved is usually substantial. This type of fraud is known as title fraud, and it involves someone using fake or stolen documents to transfer ownership of a home they do not own to their name. They then attempt to sell the property or apply for a mortgage on it. If the fraud is successful, the fraudster disappears with the money, leaving the real homeowner without a home or with an unauthorized mortgage.
Real estate agents are legally required to verify the identity of the parties involved in a transaction. They must follow the guidelines set out by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This involves confirming the validity of any government-issued photo identification presented and checking that the photo matches the individual presenting it. Real estate agents must also be vigilant for anything that seems suspicious and verify the ownership of the property by checking public land registry information.
Real estate agents must be wary of any inconsistencies, such as misspellings and errors when the buyer or seller writes their name and email address. If they notice any discrepancies, they must ask follow-up questions to verify the person’s identity. As part of the selling process, they should inquire about many aspects of the property and look for inconsistencies, inaccurate or unknown information about the property.
As a consumer, there are certain practical steps you can take to protect your identity during a real estate transaction. These include asking a real estate lawyer about the benefits of title insurance and how to obtain it, regularly reviewing your financial statements, reviewing and verifying the information in your credit report each year, paying attention to your billing cycles, and never sharing your personal or financial information by phone, email or online unless you initiated the conversation. You should also shred all financial documents before throwing them out.
If you suspect that your identity may have been stolen, you should file a report with your local police service, contact your financial institution, credit card company, both national credit bureaus (Equifax Canada and TransUnion Canada), and the Canadian Anti-Fraud Centre. If you have evidence of an identity theft crime involving the buying or selling of a property in Ontario, you should contact the Real Estate Council of Ontario.