Fraudsters falsifying ID of major banks in counterfeit bank drafts mortgage deals
June 19, 2009
LawPro has warned Ontario lawyers about yet another sophisticated counterfeit bank draft scam. This one targets real estate lawyers acting in mortgage transactions. The new scenario may include the fraudster using the identity of a major national financial institution as the lender and pretending to be the real property owner who is completely unaware of what’s happening.
The scam works similar to this: A new and previously unknown client or a lender’s representative allegedly from a major bank asks you to act on mortgage transaction in the $640,000 to $685,000 range. Shortly thereafter, you receive mortgage instructions (fake), and a legitimate looking bank draft (fake) drawn on a major bank. There is no other mortgage on title. The “borrower” is in a rush to complete the deal and get the mortgage funds.
What can you do to protect yourself? Comply with the client identification and verification rules. Use the title search, telephone book, Internet and other resources to cross-check client and bank names, addresses, phone numbers, etc. in the documentation provided to you. Don’t be rushed into paying out before your bank has confirmed to you that the funds have cleared.
For more tips on protecting yourself from counterfeit scams and fraudsters who seek to use your trust account, see Practice Watch (May, July, October and December 2008 and April 2009) in the Benchers' Bulletin, as well as earlier Notices to the Profession. A further list of Law Society publications on these and other scams is available in the Insurance / Risk Management section of the website.
If a fraudster has attempted to scam you, report it to the RCMP or your municipal police force. You can ask the police to report the matter to PhoneBusters or you can do it yourself (1-888-495-8501). To report it to the Law Society or to discuss the contents of this article and receive confidential advice, you are welcome to contact Practice Advisor Barbara Buchanan at 604-697-5816 or firstname.lastname@example.org.