(L-R) Kristian Tzenov, Stakeholder Engagement Manager for the Real Estate Council of Alberta, and Amanda Lou, Investigator for RECA, at the Red Deer & District Chamber of Commerce Lunch n' Learn on Thursday. (rdnewsNOW/Alessia Proietti)

By Alessia Proietti

Fraud Prevention Month

Real Estate Council of Alberta speaks to Red Deerians about fraud prevention in property

Feb 29, 2024 | 4:19 PM

With the ever-increasing need for housing, the Real Estate Council of Alberta (RECA) spoke to Red Deerians on Thursday of common property-related frauds and increasing trends.

March is also national Fraud Prevention Month, with this year’s theme as “20 years of fighting fraud: From then to now”, to help Canadians recognize how fraud has evolved from telemarketing and mail to social media and Artificial Intelligence (AI).

At a Red Deer & District Chamber of Commerce Lunch n’ Learn held at their local office, the Central Alberta Crime Prevention Centre (CACPC) also shared how individuals and businesses can recognize and prevent scams.

Amanda Lou, RECA Investigator, said it’s important that people report if they have fallen victim to a fraud and should not be ashamed to do so.

“Growing up, when you heard of people being defrauded, you’re like, ‘how did they get scammed? What were they think’,” she said. “These are smart, hardworking, savvy people.”

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She said fraudsters are getting smarter as well, requiring people to be more careful.

“We need to remove the shame of being a victim of fraud,” she said.

Lou shared a growing trend that took place in Ontario and B.C. early in 2023 known as Title Fraud.

READ: Impersonators posing as homeowners linked to 32 fraud cases in Ontario and B.C.

She explained that anyone can pull a property’s land title for just $20 at a registry.

Typically targeting communities with older residents who have finished paying their mortgages or with out-of-province owners, fraudsters first steal the homeowner’s identity to change the title of the home. They then take out a new mortgage, put a lien (legal right to possess a property until a debt or obligation is met), caveat (claim of interest in land), or sell the home without the owner ever being notified.

Kristian Tzenov, Stakeholder Engagement Manager for RECA, acknowledged that while the courts almost always compensate homeowners for losses from liens that fraudsters filed without justification, the system lacks protection on a structural level.

Lou added while the trend has not grown in Alberta yet, many people from Ontario and B.C. are moving to the province and owners should remain vigilant by reviewing their title annually.

According to RECA, other common types of real estate fraud include:

• Fraud for Profit: when several individuals work together to artificially inflate the price of a home. An example can be if a property has been purchased and resold several times under the claim that renovations have been made each time but haven’t.
• Fraud for Housing: When individuals use false documents and information to qualify for a mortgage. They say at times individuals, particularly immigrants, are misled into this scheme.
• Straw Buyers: similar to identify theft, an individual uses someone else’s personal information and credit history to obtain a mortgage. They say people can also get tricked into becoming a straw buyer by being offered money for their information so another can obtain a mortgage. The buyer promises that they will make the necessary payments to the straw buyer but never does.
• Foreclosure Fraud: in highly vulnerable or “rent to own” cases, this debt-consolidation scheme will typically involve the owner paying an upfront fee and transferring the title to the fraudster who promises to pay the mortgage. The original owner will continue to “rent” the home through “consolidated debt” payments to the fraudster, who instead either remortgages or sells the home.

As a precaution, RECA recommends using a licensed real estate broker, mortgage broker, property or condominium manager for their endeavors, which can be verified on their website.

They state Equifax, TransUnion, and banks are also required to offer a free credit bureau inquiry once a year so clients can see if they have been unknowingly charged and if anyone is checking their credit score.

Denise Rambow, Program & Services Coordinator of the CACPC, said it is estimated that only five to 10 per cent of victims file a fraud report with the Canadian Anti-Fraud Centre (CAFC).

The CAFC says in 2023 alone, Canadians lost a staggering $567 million, an increase of $37 million from 2022 and $187 million since 2021. They state the most reported frauds last year were identity theft, service fraud and phishing (emails and texts).

Rambow listed a myriad of scams relating to gift cards, grants, payroll, jobs, investors, directories, and more.

New scams are increasingly showing up in text messages, she says, with fraudsters claiming to be a family member who has changed their number or who send e-transfer links, which are nearly impossible to track or recoup.

In a recent survey, the Royal Bank of Canada also shared that many Canadians are worried about scams created with AI and are seeing an increasing trends in social media scams.

Rambow states that if each person were to tell two others about fraud prevention tips, it would take an unbroken chain of just 25 people doing the same to reach the entire population of Canada.

“Fraudsters and cybercriminals often operate with the confidence that they’re anonymous online and won’t be caught. But the impact that law enforcement, partners, and the public can have when working together is significant and can put a stop to more people becoming victims. As fraud continues to evolve we want to remind Canadian to remain vigilant by recognizing, rejecting, and reporting fraud,” said RCMP’s Director General of the CAFC in a release.

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