As Notaries, it’s our duty to help protect people from fraud. But that doesn’t mean we can’t fall prey to fraud ourselves. Over the years I’ve come across a number of schemes that touch the Notary community.
Sometimes fraudsters victimize Notaries directly; sometimes they attempt to draw them into the deception as unwitting participants. Here are a few of the more common scams.
Mystery Shopper Scam
Many mobile Notaries earn extra income by working as a mystery shopper. But not all shop-for-pay opportunities are legitimate.
I recently witnessed this during a visit to my local bank. A customer was trying to deposit a check from an out-of-state company that had hired the customer to do some mystery shopping. It turned out that the check was fake, and that the bank was required to report this to the authorities.
The customer explained that she received the check in exchange for immediately wiring a portion of the check amount back to the company. She was to use the rest to pay herself and purchase items as a mystery shopper. Unfortunately, the bank manager informed the customer that she was a victim of a common scam.
This isn’t the only mystery shopping scam out there. The U.S. Federal Trade Commission has a resource page about mystery shopping fraud. Also, check out Notary Bulletin articles on taking advantage of legitimate mystery shopping opportunities and other ways to earn income.
Cash Purchase Scam
This has become a common scam: A fraud ring tries to steal a property, typically a bank-owned home or similar property that is empty, and use it to get a fraudulent loan or sell it to an unsuspecting buyer.
Notary signing agents get caught up in it when they are brought in to conduct a closing on what appears to be a cash purchase. In reality, the scammers are impersonating buyers or sellers. Because no mortgage is involved, the normally required closing guidelines, including the identification requirements, are not in place. So Notaries sometimes are asked not to check the buyer’s identification at these transactions.
This has happened to me on several occasions. In most cases, the real estate agent asked me not to check IDs. If you’re only handling the buyer’s side of the transaction, there might not be a notarization involved in the signing. I still always ask to verify the signer’s identity. However, if a title company is involved in the transaction, the title insurance policy typically will require you to verify the identity.
Your Boss’ Scam
I often hear from both seasoned, and new Notaries, that their employer has requested that they notarize documents without ever seeing or speaking with the person who has signed the document.
Most of the time this is merely your boss’s effort to not inconvenience a client, but going along with the request still violates Notary law. A number of Notaries have told me of situations where the request stems from an outright fraud.
Typically, the boss is going through a divorce and is attempting to sell or mortgage property jointly owned with the spouse. So they come to the Notary employee and ask for a favor accompanied with an excuse for the absent spouse: “My wife’s out of town.” “My husband is not feeling well.”
And it can be hard to say no to your boss. But when the fraud is discovered, you are likely to get a call from an attorney or even a member of law enforcement. Failure to require personal appearance is probably the most common reason for claims being filed against Notaries. So hold firm and insist that every person whose signature you notarize appears before you.
Have you encountered similar situations? Please share them in the comments section below.
Daniel Lewis of Carmel, Indiana, is the founder of Lewis Notary Services Inc., a nationwide mobile service. He also teaches Notary best practices and is a former NNA Notary of The Year.