Power of Attorney Fraud

[Lord777]

A power of attorney is a convenient tool that allows a person to be in two places at once. A person can be on vacation, on medical treatment, on a business trip, and the business part of his life will not suffer. Under a power of attorney, you can rent or sell real estate or other property, use a car owned by another person, and represent the principal in government agencies and transactions. But this convenient tool in all respects can become a formidable weapon in the hands of scammers. The victim can do nothing against it.

How it happens​

Here are just two typical and very revealing cases of power of attorney fraud.

The woman bought an apartment. The seller was not the owner, but a representative by proxy. The power of attorney was issued by a notary and did not cause any doubts either among the buyer or among the employees of the Federal Registration Service, where the transaction was registered. But it soon became clear that the real owner of the apartment was not going to sell the house, and no power of attorney for its sale was not issued.

In such situations, the transaction is declared invalid by the court. The buyer returns the apartment to the seller without receiving anything in return. The buyer is left without an apartment, without money, and in most cases-with a large mortgage loan, which he will have to pay off.

The man suddenly discovered that someone had withdrawn all the money from his bank account. We did this by a notarized power of attorney. The document, as well as the passport of the citizen who presented it, were authentic. But the man himself did not write out a power of attorney to anyone!

How do criminals manage to get a power of attorney?​

The weak point in obtaining a power of attorney is the notary. He can not refuse a citizen to conduct a notarial procedure without good reasons, and at the same time is limited in the ability to identify the identity of the principal.

The power of attorney is issued by the person who transfers the rights to dispose of the property. The recipient of the power of attorney may not be present during the procedure.

First, scammers learn as much as possible about the victim. In the first of our cases, everything was simple: the fraudster officially rented an apartment from the owner, and so found out who the apartment was issued for. The contract also specifies the owner's passport details. In the second case, the fraudsters received information that the victim had an account with a large amount in a particular bank and somehow obtained passport data.

The passport details are the same as the victim's, but the photo is the criminal's. Then a fake is made. With a forged document, the fraudster goes to a notary and on behalf of the victim draws up a power of attorney for himself or a third party. That's all, now he can dispose of other people's property. The power of attorney is real. The fake on it is just a signature.

Verification in the bank, Rosimushchestvo and other organizations is difficult. The fraudster's passport is real, and so is his power of attorney. All database checks confirm the authenticity of the documents, and the attacker's face matches the passport photo. At this stage, it is possible to stop a crime only in isolated cases – if something in the behavior of the criminal prompts the bank employee to contact the account holder and ask him for confirmation of the operation. But such actions are not provided for in ordinary banking protocols.

What can a notary do?​

A notary can catch a criminal by the hand. When issuing a power of attorney, he must make sure that the passport is real and that the real owner is in front of him. But the list of actions that a notary is required to perform by law is small, and fraudsters skillfully bypass it. Additional checks are a personal initiative of the notary himself, if he wants to insure himself or if he has any suspicions.

There were cases when notaries managed to save someone else's property, if they paid attention to the age difference between the passport holder and the attacker sitting in their office, or when they asked to show any other document with a photo. However, such actions are not included in the direct duties of these lawyers stipulated by law.

Where to find the truth?​

The victim has three options for whom to make claims. This:

• the real owner of the apartment, the bank or other persons and organizations involved in the situation;
• cheater;
• notary.

In the first case, claims will be sent to the same victim of fraudsters. In the case of an apartment, the law will definitely be on the side of the seller, since transactions made with deception are insignificant. It doesn't matter that it wasn't the buyer who cheated.

In most cases, the bank will also easily prove that it is not guilty. But it makes sense to apply there with a claim. After all, it is possible that it was from the bank that a data leak occurred, which allowed fraudsters to choose a victim. In addition, it is necessary to make sure that the bank employee has done everything in his power to prevent fraud during the operation.

It is best to cooperate with this side of the situation. If one of the parties is a bank, then a competent, calm, balanced line of behavior can help to come to an amicable agreement that is beneficial for the victim of fraudsters. But this is only possible if the bank makes a voluntary decision.

Trying to get money from a fraudster is fair, but shortsighted. First, the police have a habit of refusing to accept such applications, stubbornly not finding any elements of a crime in the actions of intruders. Secondly, finding the culprit is not a quick task. Even if he is found and convicted, it is not a fact that he will have money to pay damages. Payments can last for years.

That leaves the notary. For the legality of notarial actions that this specialist confirms, he is responsible for his property. Such specialists must insure their liability. Issuing a power of attorney using a fake passport is definitely illegal. The only question is whether the notary did everything he could to confirm the identity of the person who applied to him.

In practice, the courts of first instance usually side not with the victims of fraud, but with the notary and the insurer. But the courts of second instance and the Supreme Court often find arguments according to which the victim of fraud receives compensation from the insurance company. Of course, if the notary did everything correctly, and the fraudster was too sophisticated, the case will not be considered insurance. And then the victim can only hope that law enforcement agencies will find the criminal.

How to protect yourself?​

Unfortunately, the victim can't protect himself from power of attorney fraud in any way. You can reduce the probability of such an event by trying not to leave your passport data where any other ID card can be used instead of the main one.

The professional notary community is aware of the problem. Measures to protect against fraud with a power of attorney are actively discussed, and lawyers share their experience. However, no universal method of protection has been developed yet.