05/25/2022
Real Estate Fraud
Fraudulent Schemes Using Notaries
Educate Yourself
We have recently seen a disturbing trend where notaries are unwittingly used to perpetrate fraud. A purported "Seller" will sell a property, receive the funds, and some time later, the actual seller goes to sell the property and learns of the sale. This results in claims against the title company and notary.
Recently, a California court held in case N. Am. Title Co. v. Gugasyan, 73 Cal.App.5th 380, 288 Cal. Rptr. 3d 420 (Cal. Ct. App. 2021) that the notary wasn't responsible for negligence when reviewing a fraudulent ID. While the CA court held the notary was not liable, this might not happen in all states.
Here is a list of tips for authenticating a signer's ID for notarization.
Always ask to physically hold and examine the ID.
Make sure the ID meets your state's notary law requirements.
Familiarize yourself with security features on common IDs for your state.
If something doesn't match, look for other discrepencies such as hair color, height or weight.
Record ID information in your journal entry if applicable.
Above all else, if you have any doubt and are suspicious of fraud, pause the transaction and protect yourself from these trending schemes.
