Attempts of fraud targeting real estate agencies and brokers: be careful!

The OACIQ regularly receives calls from real estate brokers regarding fraud schemes.  Here are a few examples of situations that require your vigilance, as well as precautions to take.

Fraudsters’ typical process      

With small variations, here is how fraudsters proceed:

• A foreign buyer shows you his interest in a property. Then he asks you to prepare a Promise to purchase and send it to him to sign it;
• He sends you back the Promise to purchase duly signed along with information about his identity and a deposit cheque for your trust account;
• A few days later, he withdraws his Promise to purchase or aborts the transaction and requests the refund of his deposit;
• You must then issue a cheque in his name from your trust account;
• Whereas, the deposit cheque was forged.

Prevention tips

We encourage you to be more careful. Here are how to protect yourselves against this fraud:

• The fact that the amounts are deposited in your trust account is not necessarily a confirmation that the deposited cheque was valid. Before issuing a refund cheque, check with your financial institution to ensure that the funds deposited into your trust account come from a valid cheque;
• Be patient: sometimes, it takes a few extra days before the financial institution realizes that it is a forged cheque. The time for clearing a cheque from outside Canada may extend up to 45 or even 90 days;
• When in doubt, talk to your agency executive officer;
• If it is indeed a forged cheque, contact the police.

Electronic transfer: An additional protection

Another way to protect yourselves is to ask for an electronic funds transfer, which is a safer solution. For more details on electronic transfers, read the article What to do when a deposit is received by electronic funds transfer rather than by cheque.

Thank you for brokers who inform us of fraud attempts.