Counterfeits certificates of title

In February 2009, Land & Property Information issued a circular advising of a mortgage fraud scheme currently operating in Victoria affecting New South Wales Land.

The counterfeit certificates of title, together with forged identity documents purporting to prove that the fraudster is the owner of the property on the title, are being used as security to obtain mortgages over properties of innocent third parties.

Whilst new enhance security features in the form of a Certificate Authentication Code were introduced in January 2004, the certificates of title currently being produced are in the pre January 2004 format, with no security features.

What is identity fraud?

  • 'Identity fraud' generally involves a person falsely representing himself or herself as either another person or a fictitious person.
  • These misrepresentations of identity are made possible by either obtaining (through theft or fraud) documents and personal data of another individual or by the production of false documents themselves.

Transactional fraud

There are an increasing number of incidents of fraud in conveyancing transactions involving:

(a) Counterfeit certificates of title used to obtain funds from mortgagees as in the current mortgage fraud scheme

(b) Replacement certificates of title issued to fraudsters, often involving unencumbered properties

(c) Forged deposit bonds.

What should you do?

Suggested steps to minimise the likelihood of being a victim of transactional fraud are:

  • Keep your personal documents and data secure.
  • Know where your original certificate of title is being held.
  • Make it your business to know who you are dealing with. This is not always obvious. Obtaining proof of identity is a routine due diligence procedure. If a party is unwilling or reluctant to supply the proof of identity – this may simply confirm the need to ensure that it is provided. There is nothing in the Privacy & Personal Information Protection Act 1998 (NSW) that prevents the requirement of proof of ID in the context of a commercial transaction.
  • If you are a purchaser, understand how the current registered proprietor came to be noted on the certificate of title for the property. If this seems unusual, further enquiries should be made.
  • If a title search contains a notation that the certificate of title has been issued pursuant to s111 of the Real Property Act 1900, further queries should be made of the vendor or the mortgagor.

Swaab was recently named a 2009 Winner in the ALB Employer of Choice awards, and was winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' in the 2008 BRW- Client Choice Awards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.