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
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
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
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
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
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
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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.
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