Real estate involves large monetary transactions and deals with various entities to sell residential properties. Large amounts of monetary investments are carried out in this sector, making it desirable for criminals to commit property scams. Criminals use illicit monetary funds and purchase properties through a third party to conceal their original identity. According to a 2022 report, there have been 21,497 cases reported of possession of stolen property in Canada. This crime rate has been increasing due to imposter’s utilization of technology for illicit purposes. Real estate must use EIDV solutions to minimize these scams for secure property transfers.
Electronic Identity Verification – An Effective Solution to Mitigate Property Scams
Electronic identity verification is a digital method of authenticating the customer’s identity using automated authentication solutions. Electronic IDV is essential for real estate as it can prevent imposters from conducting property scams. Imposters use various innovative ways to disguise their illicit funds and use them to purchase real estate properties. They use a third-party account to make property transactions and conceal their real identity. Imposters take loans from an authorized financial institution and use the proceeds to purchase a property and resell it without paying back the loans. They collaborate with real estate agents and defame the property value for their illicit interests.
To overcome these property scams, the real estate sector must validate the authenticity of their buyers and sellers before giving them property rights. This can be done by incorporating electronic identity verification services. E-IDV solutions use biometrics and machine learning technologies to validate the legitimacy of a customer’s identity through automated facial recognition, fingerprint scanning, customer due diligence, and OCR scanning. These services check the customer’s legitimacy against official government directories to verify the authenticity of a property’s buyers and sellers.
User e-Identity Authentication – Utilizing AML-Compliant Electronic Solutions to Protect Real Estate
The real estate sector is susceptible to money laundering crimes as criminals use illicit monetary funds and conceal these funds by making illicit property purchases through third parties. They continuously buy and sell the property by making transactions through multiple banks until they make the funds seen as authentic and legitimate. The real estate must comply with the AML guidelines to overcome these money laundering attempts.
These guidelines require real estate companies to use electronic ID verification methods through the customer due diligence process to analyze the customer’s risk patterns. AML compliance requires property dealers to grain the property personnel and mitigate the money laundering attempts, and failing to do so will lead them to severe monetary penalties.
Global Electronic Identity Verification – Enhancing Transparency of Beneficial Owners to Minimize Property Crimes
The beneficial owners of the real estate sector are the main entities that must be verified to authenticate their legitimacy. Their identity must be verified to ensure that the real estate agency is under the ownership of a risk-free and secure entity. Often times, the beneficiaries of real estate companies are involved in high-risk activities and included in illegal financial activities. It is crucial to ensure the transparency of their identity, which can be done through an enhanced due diligence process.
Enhanced due diligence process entails verifying the beneficial owners against official government watchlists, such as politically exposed person (PEP) lists, sanction lists, criminal watchlists, and exit control lists. An advanced due diligence process uses automated technology through which companies can effectively screen the customers against these watchlists to validate their authenticity.
Property Scams – Trends to be Aware of in Property Transactions
There are certain trends that customers must be aware of when conducting property exchanges. Sometimes, imposters manipulate authentic buyers to make property purchases under their names. They transfer the illicit funds into legitimate accounts to conceal the laundered money, negatively impacting the legal accounts. Companies must ensure a thorough customer e-IDV by conducting an extensive risk assessment of their financial history. The real estate agencies should validate the customer’s identity through biometric face checks to compare the underlying documents with their liveness detection to validate their authenticity.
Check Electronic Identity – Benefits for Effective Real-Estate Transactions
Electronic verification utilizes automated machine-learning technology that detects property owners’ and buyers’ risk patterns, IP addresses, proof of income and address. These services use automated data extraction and verification solutions that provide accurate findings, mitigating the risk of manual errors. E-IDV makes the document verification process faster and more secure, making real estate transactions convenient and accurate for secure property transfers.
Summing It Up
Electronic IDV is an essential solution for effective real estate property transactions. The real estate industry is highly susceptible to money laundering attacks. It is significant for them to ensure compliance with the AML regulations to minimize money laundering risks. The real estate property transfers can be made secure by validating the identity of their beneficial owners. Electronic identity verification validates the customer’s identity through proper customer due diligence processes to identify customer’s potential risk patterns, making property transfers risk-free.
