Identity fraud and torrens - minimising the risks and allocating the loss to achieve a sustainable system

Immediate indefeasibility is the cornerstone of the Torrens system of land registration. However, when combined with the apparent ease in which forged mortgages become registered, the operation of this doctrine can come into question. This article seeks to argue that, rather than question indefeasibility, the focus should be on the verification of identity of parties to land transactions. Whilst no system can ever be infallible, it is suggested that by correctly imposing the responsibility for identity verification on the appropriate individual, the Torrens system can retain immediate indefeasibility as its paramount principle, yet achieve the optimum level of fairness in terms of allocation of responsibility and loss. With the dawn of a new era of electronic conveyancing about to begin, the framework suggested here provides a model for minimising the risks of forged mortgages and appropriately allocating the loss.

Identity fraud and land registration systems : an Australian perspective

There is no doubt that fraud in relation to land transactions is a problem that resonates amongst land academics, practitioners, and stakeholders involved in conveyancing. As each land registration and conveyancing process increasingly moves towards a fully electronic environment, we need to make sure that we understand and guard against the frauds that can occur. What this paper does is examine the types of fraud that have occurred in paper-based conveyancing systems in Australia and considers how they might be undertaken in the National Electronic Conveyancing System (NECS) that is currently under development. Whilst no system can ever be infallible, it is suggested that by correctly imposing the responsibility for identity verification on the appropriate individual, the conveyancing system adopted can achieve the optimum level of fairness in terms of allocation of responsibility and loss. As we sit on the cusp of a new era of electronic conveyancing, the framework suggested here provides a model for minimising the risks of forged mortgages and appropriately allocating the loss. Importantly it also recognises that the electronic environment will see new opportunities for those with criminal intent to undermine the integrity of land transactions. An appreciation of this now, can see the appropriate measures put in place to minimise the risk.

Land fraud and inappropriate dealings in an electronic environment : An Australian and New Zealand perspective

The thesis presented in this paper is that the land fraud committed by Matthew Perrin in Queensland and inflicted upon Roger Mildenhall in Western Australia demonstrates the need for urgent procedural reform to the conveyancing process. Should this not occur, then calls to reform the substantive principles of the Torrens system will be heard throughout the jurisdictions that adopt title by registration, particularly in those places where immediate indefeasibility is still the norm. This paper closely examines the factual matrix behind both of these frauds, and asks what steps should have been taken to prevent them occurring. With 2012 bringing us Australian legislation embedding a national e-conveyancing system and a new Land Transfer Act for New Zealand we ask what legislative measures should be introduced to minimise the potential for such fraud. In undertaking this study, we reflect on whether the activities of Perrin and the criminals responsible for stealing Mildenhall's land would have succeeded under the present system for automated registration utilised in New Zealand.

Immediate indefeasibility : is it under threat?

Immediate indefeasibility has been adopted in Australia for close to 40 years. Recently however, and against the backdrop of economic fragility and global deregulation, there has been a polite questioning of its place. In Australia, some may argue that case law developments and legislative reform have placed indefeasibility under the microscope — in New Zealand, a similar telescoping by the respected views of their Law Commission. This note examines these reforms. It concludes that these reforms do not place immediate indefeasibility under threat. Rather, they modify and adapt the doctrine to fit within the context of contemporary financial instruments. Nevertheless, changes have so far been piecemeal, and its time for a consistent and logical examination of this issue to occur on the national, rather than the stage of each state.

Qualified indefeasibility and the careless mortgagee

In recent years a great deal of case law has been generated in relation to mortgages where the mortgagee has not engaged in adequate identity verification of the mortgagor and the mortgage has subsequently been found to be forged. As a result, careless mortgagee provisions operate in Queensland as an exception to indefeasibility. Similar provisions are expected to commence soon in New South Wales. This article examines the mortgagee’s position with the benefit of indefeasibility and then considers the impact of the careless mortgagee provisions on the rights of a mortgagee under a forged mortgage, concluding that the provisions significantly change the dynamic between a registered mortgagee and registered owner who has not signed the mortgage. These provisions appear to give the mortgagee a conditional indefeasibility, with the intention of reducing the State’s exposure to the payment of compensation in the case of identity fraud. They are however, more successful in the case of forgery by a third party rather than forgery by a co-owner.

Electronic conveyancing in Australia: Is anyone concerned about security?

Three proof requirements as essential for a sustainable land registration system. These were proof of identity, proof of ownership, and authority to deal. Our attention in this paper is drawn to the latter two requirements and will ask whether the introduction of the Property Exchange of Australia (PEXA), and its underpinning regulatory regime will meet the concerns that we have in relation to proof of ownership and authority to deal. In drawing out some problems with PEXA, we then offer an innovative idea, sourced from the transfer of equities that could serve to generate discussion on how we can ensure the Torrens system of land registration is sustainable for another 160 years.

The Donald Mackay Churchill Fellowship to study methods of preventing and supporting victims of online fraud

Every day inboxes are being flooded with invitations to invest money in overseas schemes, notifications of overseas lottery wins and inheritances, as well as emails from banks and other institutions asking for customers to confirm information about their identity and account details. While these requests may seem outrageous, many believe the request to be true and respond, through the sending of money or personal details. This can have devastating consequences, financially, emotionally and physically. While enforcement action is important, greater success is likely to come in the area of prevention, which avoids victim losses in the first place. Considerable victim support is also required by victims who have suffered significant losses, in trying to get their lives back on track. This project examined fraud prevention strategies and support services for victims of online fraud across the United Kingdom, United States of America and Canada. While much work has already been undertaken in Queensland, there is considerable room for improvement and a great deal can be learnt from these overseas jurisdictions. There are several examples of innovative and effective responses, particularly in the area of victim support, that are highlighted throughout this report. It is advocated that Australia can continue to improve its position regarding the prevention and support of online fraud victims, by applying the knowledge and expertise learnt overseas to a local context.

Identity verification in conveyancing : the failure of current legislative and regulatory measures, and recommendations for change

"Defrauding land titles systems impacts upon us all. Those who deal in land include ordinary citizens, big business, small business, governments, not-for-profit organisation, deceased estates...Fraud here touches almost everybody." the thesis presented in this paper is that the current and disparate steps taken by jurisdictions to alleviate land fraud associated with identity-based crimes are inadequate. The centrepiece of the analysis is the consideration of two scenarios that have recently occurred. One is the typical scenario where a spouse forges the partner's signature to obtain a mortgage from a financial institution. The second is atypical. It involves a sophisticated overseas fraud duping many stakeholders involved in the conveyancing process. After outlining these scenarios, we will examine how identity verification requirements of the United Kingdom, Ontario, the Australian states, and New Zealand would have been applied to these two frauds. Our conclusion is that even though some jurisdictions may have prevented the frauds from occurring, the current requirements are inadequate. We use the lessons learnt to propose what we consider core principles for identity verification in land transactions.

Identity theft, computers and behavioral biometrics

The increase of online services, such as eBanks, WebMails, in which users are verified by a username and password, is increasingly exploited by Identity Theft procedures. Identity Theft is a fraud, in which someone pretends to be someone else is order to steal money or get other benefits. To overcome the problem of Identity Theft an additional security layer is required. Within the last decades the option of verifying users based on their keystroke dynamics was proposed during login verification. Thus, the imposter has to be able to type in a similar way to the real user in addition to having the username and password. However, verifying users upon login is not enough, since a logged station/mobile is vulnerable for imposters when the user leaves her machine. Thus, verifying users continuously based on their activities is required. Within the last decade there is a growing interest and use of biometrics tools, however, these are often costly and require additional hardware. Behavioral biometrics, in which users are verified, based on their keyboard and mouse activities, present potentially a good solution. In this paper we discuss the problem of Identity Theft and propose behavioral biometrics as a solution. We survey existing studies and list the challenges and propose solutions.