A new report has revealed the top eight types of property most at risk of fraud with the aim of helping to prevent property professionals from unwittingly enabling fraud or money laundering.
According to Thirdfort, a risk management platform combining Know Your Client (KYC), Anti-Money Laundering (AML), and Source-of-Funds (SoF) verification, property lawyers and agents working on any of the following eight types of property transactions should be extra vigilant:
“Fraud and fake ID documents are on the rise,” said Thirdfort. “Criminals will stop at nothing to bypass controls and use many methods to engage in fraud. These include obtaining fake IDs, changing their name to a property owner’s name, and illegally obtaining genuine documents to open a bank account. Property lawyers and agents are particularly vulnerable and often most at risk of being targeted.”
“While firms may see individual lawyers and agents as a risk, they are also the best line of defence,” said Harriet Holmes, AML services manager at Thirdfort:
“Property firms should regularly update staff training on the risk around identifying fraud and the red flags of which they should be aware. It is also worth becoming familiar with government guidance on how to examine ID documents.”
Holmes added that “with the right technology, documents can be identified as fraudulent in minutes”. Thirdfort said that while spotting forgeries is difficult, there are some key red flags property professionals should look for. These include:
- secretive clients
- clients who are unwilling to meet in person, over video or engage in technology control to mitigate risk
- recently issued IDs
- lack of knowledge about the transaction or the property itself
- cash transactions
- documents that appear to be tampered with or altered
- if a third-party is acting on behalf of a seller
