7.13 Identity Fraud

Lawyers need to be vigilant about the potential for identity fraud, even after having identified and verified clients.

If something doesn’t seem right about a transaction that comes into your office, ask questions.

One identity fraud scheme a few years ago involved fraudsters who identified properties which were mortgage-free. The fraudsters obtained false drivers’ licenses in the names of the owners and then applied for private mortgages. The interest rates on the loans were typically higher than rates offered by chartered banks. Funds would be advanced from a lawyer’s trust account—payable to third parties who were alleged to be contractors performing renovations. Ultimately the homeowners, who had no knowledge of any of this, ended up with a mortgage on their homes. Asking about unusually high interest rates can be an important part of fraud prevention.

Please see “Detecting Identity Fraud” for tips on checking drivers’ licenses for authenticity and other steps you can take to help you prevent identity fraud.

<7.12 Criminal Activity and the Duty to Withdraw

7.14 The No Cash Rules>

Last modified: Tuesday, 28 March 2017, 5:51 PM