Last year it was revealed that some properties in Western Australia had been sold out from under their overseas owners by fraudsters. Consumers, government and agents were so horrified they acted quickly to introduce new laws to protect the identity of property owners and prevent any more cases of property scams in the state. But the new identity requirements to combat the property scams have come under fire from a Perth real estate agent, who says the storage of personal data could be opening up further potential for identity theft. We look at the criticism from the Perth agent, and what we might be able to expect in the future in every state in terms of identity identification and the protection of both mortgage and the clear credit file of property owners across the country.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au.

In W.A. today late last week, RE/MAX WA Managing Director, Geoff Baldwin came out in criticism of the State’s identification check legislation instigated following Perth’s property scams.

He called the legislation “a debacle, unnecessarily inconveniencing sellers and causing confusion and in some cases anger,” he was quoted in W.A. Today.

He said the Code of Conduct required “due skill, care and diligence” to properly identify sellers before a sale goes through, and that this meant that during a 100-point identification check, real estate agents were keeping personal documents in order to demonstrate the fulfilment of this requirement.

“It upsets a lot of sellers who, in these days of identity theft, rightfully feel uncomfortable with having copies of their passports, licences, etc sitting in manila folders in offices across Perth which is now the requirement for agents to comply with their yearly audits,” he said.

“There is no argument that an ID system is required to make it as hard as possible for fraudsters to succeed but the current misinformation, doubling up, copying and storing of peoples personal information in agents’ offices is madness and has the capacity to replace one security problem with another.

Mr Baldwin suggested an alternative method of identification which he hoped would be more secure for sellers.

“The government needs to act now to refine the one system whereby prospective sellers attend the post office once, provides the required identification which is registered online as having been cleared,” he said.

“This ID clearance should be associated with the particular property and the secure database should be accessible using a PIN, to agents, brokers, and settlement agents for their clients only.

But his suggestions were rebuffed by director of property industries at Consumer Protection, Stephen Meagher.

“The public are asked to provide ID when opening bank accounts, phone accounts etc and accept that to protect their interests in property that ID checks are required when selling their home.

“Sellers may not always be within easy reach of an Australia Post outlet – either remote in Australia or overseas. “There would be fee for service implications in the Australia Post proposal.”

WA Property Scams explained.

In 2010, Wembley Downs retiree Roger Mildenhall had his Karrinyup investment property sold without knowing anything about it. And in 2012 Nigerian-based scammers sold a Ballajura property without the owners’ knowledge.

“A couple returning from overseas have advised authorities that their property has been sold without their knowledge or consent and a joint investigation has been launched.

The previous owners were living and working overseas at the time and didn’t discover the property had been sold until they recently returned to Perth to inspect the property.

The real estate agent involved has told investigators that he received a phone call from a man claiming to be the owner in February this year inquiring about the property. Shortly after, the agent received an urgent request to sell the property as funds were needed for a business investment, later revealed to be a supposed petro-chemical project,” Landgate announced in a statement.

With the scale of the scam, it is understandable that Government and Agent groups would have acted swiftly to try to combat any further instances of fraud. But Baldwin probably has a legitimate argument when we look at the methods that have been taken to combat it – considering how valuable personal information has become. He, like many others, have reservations regarding the amount of personal information which must be stored by different entities, and the likelihood that that personal information could fall into the wrong hands – like an identity thief’s. It is ironic that the protections we have instigated to combat identity theft seem to put us at greater risk of it. We’re damned if we do, and we’re damned if we don’t.

Perhaps the answer is some kind of centrally stored database for identity checks – or maybe the old-fashioned paper storage is safer in this age of rising cyber-crime.

Personal information and your credit file

Fraudsters now see personal information as a valuable commodity. Many are able to use that information to take out credit in the victim’s name. Often the victim is not alerted to the misuse of their credit file for some time, often not until they attempt to obtain credit themselves. By then, victims may have credit applications as a minimum and possibly defaults, mortgages and mobile phones attributed to them incorrectly.

Once any account remains unpaid past 60 days, the debt may be listed by the creditor as a default on a person’s credit file. Under current Australian legislation, defaults remain listed on the victim’s credit file for a 5 year period.

If a victim has defaults on their credit file following identity theft – the defaults still remain there for 5 years. The onus is then on the identity theft victim to prove to creditors they didn’t initiate the debts in their name. If they are unable to prove this, they are virtually blacklisted from obtaining further credit themselves for 5 years.

It is important for everyone to think twice about who they allow to have access to their personal information, and to verify all transactions are legitimate before handing over their details or any money.

For more information on identity theft and your credit file, visit the MyCRA website www.mycra.com.au.

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