A Notary Public has very specific rules to follow when performing a notarial ceremony. Perhaps one of the most important is to correctly verify the identity of the signer, especially when it comes to executing real estate documents. That’s because deed fraud is still a problem plaguing municipalities, homeowners, and title professionals everywhere.
Almost every case of deed fraud involves a compromised notarization, making a notary a critical guardian of the transaction. In some instances, the notary is duped by a convincing fake ID or backstory told by a con artist. In others, their signature and seal are forged.
Here are some of the tricks fraudsters use to dupe notaries and tips to avoid falling into their trap.
How Notaries get duped by fraud
To stop fraudsters and their scams of deed fraud, it’s important to understand some of the tools they used, which include:
- Fake IDs
- Social Engineering
How to Spot a Fake ID
There are over 240 government-issued IDs in the United States! A public notary may come into contact with any one of these at some point in his or her career. While it would be impossible to memorize every single detail of each, there are some things to do to avoid getting duped by a fake ID.
- Be sure to pick up the ID and feel it carefully for security features like raised characters on the date of birth or signature.
- Some counterfeit IDs will be constructed with two printed pieces glued together. Feel for jagged edges or separation of the card.
- Another approach counterfeiters use is to glue or laminate over cutouts on the photo or date of birth, creating bumps on what should be a smooth surface.
- Carefully look and check for the obvious: does the height listed match? Is the text clear and sharp? Does the age of the presenter match the date of birth? Are there any misspellings? Is the ID still valid?
- Carefully examine the ID for any disjointed images, overlapping images on text, or a magnetic strip that is placed too high or too low.
- Additionally, many states have a UV feature on their ID, which become visible under the light of devices like the Fraud Fighter.
- Ask the presenter of the ID questions to confirm their birthday, address, or height.
For Notaries and loan signing agents, spotting a fake ID isn’t the only concern. When dealing with a large volume of documents, real estate closings, or instruments that transfer title to property, there are other forms of fraud that require your vigilance.
Social engineering is when a criminal uses deception to manipulate an individual to divulge sensitive information or, in the case of a notary, perform a notarization for fraudulent purposes.
Some behaviors to pay attention to include:
- Distracting conversation
- Asking you to hurry
- Playing on your sympathy
- Using their authority as leverage
One example of playing on a person’s sympathy includes a paralegal, who was approached by a woman to notarize a deed that had been signed by her husband. The only problem is that the husband was home sick, but she had his driver’s license for identification. Although notary laws clearly state that the signers must be present either in person or by audio-video technology, the paralegal gave into the request once the woman rang up her husband on the phone to confirm his consent.
Unfortunately, the man the paralegal spoke to turned out to be the woman’s boyfriend and not her husband. When the fraud was exposed, the paralegal faced legal consequences, which included losing her commission, repaying the surety bond used to pay for the husband’s legal expenses, and ultimately left her with limited ability to successfully carry out her job responsibilities.
How Notaries can deter fraud
Use a reference guide for IDs
There are several reference books that notaries can use to check the validity of ID documents. Since other forms of government-issued identification cards may be used, the ID Checking Guide: Internal Edition provides a comprehensive overview. To ensure that the bad guys don’t get their hands on it, you must show proof of your notary commission to purchase it.
Be mindful of the principal’s behavior
Pay attention to the demeanor and behavior of the signer for any red flags. When asking questions about the ID, watch for any nervousness or uncertainty.
Review every document
Some people are naturally gregarious and charming, but distracting conversation could also be a ploy. Another scam includes slipping a document with another individual's signature into a pile of others that are legitimate. In order to avoid being distracted into notarizing the fraudulent document, carefully review each and every document.
Keep a detailed journal
Shockingly, in the state of Florida, a notary public is not required to maintain a journal, but it is heavily encouraged. According to a grand jury report on deed fraud, the journal is a valuable tool in maintaining the reputation of the notary.
Properly attach notarial certificates
When a document requiring a notarial certificate, like an acknowledgment for a deed, must be attached separately, notaries should take extra care to ensure it can’t be fraudulently used with another document. For states that allow a “loose” certificate, be sure that the corresponding document is clearly described.
Never bend the rules
A notary’s commission is theirs alone to uphold. Even if a notary’s employer paid for their training and supplies, the notary is beholden to carry out their duties as outlined in state statutes. Sometimes, an employer may try to leverage their authority to pressure the notary into bending the rules, so notaries must be prepared to refuse.
Remote Online Notarization and Fraud Prevention
States are releasing newly formatted licenses with updated security features on a regular basis. By October 2020, all states must be compliant with the REAL ID Act, which means more IDs to keep track of in the near future.
It’s simply impossible for the human eye to keep up with all of these changes. In fact, one study conducted at Louisiana State University with over 1,150 Notaries showed that imposters were identified correctly about 72 percent of the time.
The study further revealed that new notaries performed as well as ones that had been commissioned for more than 20 years. What really mattered was the number of IDs the notaries encountered on a weekly basis. Those who checked 15-20 IDs a week were more likely to spot a fake than Notaries who checked 10-15 IDs a week.
Thanks to remote online notarization technology, notaries have access to a tool that scans and recognizes a fake ID with 100% accuracy as well as provide other ways to prove the identity of the signer with knowledge-based authentication questions. Along with a video recording of the notarial act, a tamper-evident seal is applied to digital documents, making fraud virtually impossible.
To learn more about the emerging technology of RON, watch the replay of this webinar.