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Q&A: The Notary's Role In Preventing Identity Theft And Ensuring Compliance

The threat of identity theft is particularly strong in the banking and financial services industry, where Notaries often play a key, frontline role in the detection and prevention of such scams. The Financial and Corporate Services Section spoke with Steven Camp, partner in the Dallas office of Gardere Wynne Sewell LLP, about emerging trends in identity theft, certain safety precautions Notaries should take to protect themselves and the public, and how companies can better detect and deter identity theft.

What trends are you seeing in identity theft in the financial sector? 
One of the most significant areas is in mortgage lending. There have been a number of incidents where an individual discovers that his or her identity has been misappropriated in obtaining a mortgage loan. In these circumstances, the mortgage loan involves the flipping of property and inflated appraisals. The individual will discover that their identity was used as an ‘investor’ who was purchasing the property for an inflated amount.

How can Notaries protect the private information they gather from their signers in their journal of notarial acts?
Frequently the documents notarized by a Notary will eventually be a part of the public domain, such as deeds, mortgages, wills and such. However, those documents do not contain personal identifiers, such as driver’s license numbers, so it is actually the Notary’s records that contain information that would be valuable to an identity thief. Such information would include the name, address and driver’s license number of the signer. As such, a Notary should be aware of the value of the information that they obtain and take appropriate steps to protect it, such as keeping Notary journals in a locked drawer.

What should a Notary do if they suspect that a signer is not who he or she claims to be, or if they suspect the signer is using a fraudulent ID?
Step one should be to not accept identification that the Notary is not comfortable with. The Notary can insist on an alternative form of identification or simply decline to notarize a document if they are not comfortable with the circumstances. It is better to be safe than sorry.

What are some mistakes financial companies make with regards to proper documentation and compliance? 
Most frequently managers or other employees attempt to persuade a Notary to notarize the document without the signer’s physical presence in the interest of time, or as a service to the customer. Everyone should realize that the role of a Notary is to ensure the proper notarization of documents. Shortcuts shouldn’t be taken in the interest of time or for the sake of ‘customer service.’

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