RECA makes flagging fraud easier with launch of online anonymous reporting

With its fraud investigation numbers rising in recent years, and a concern there may be even more going unnoticed, the Real Estate Council of Alberta wants to ensure there are no barriers to the reporting process — which can pose uncomfortable obstacles for individuals inside and outside the industry.

“A lot of fraud is suspected and not reported,” said Gary Siegle, RECA’s Mortgage Broker Practice Advisor. “Based on our belief that there’s way more fraud going on than we hear about, we thought we could remove some of the fears by making it relatively simple to report fraud anonymously.”

In an effort to further combat fraud in the industry, RECA has launched an online anonymous fraud tip submission form.

Industry partners—including mortgage brokers—and consumers may remain unidentified while reporting suspected wrongdoing, joining the Real Estate Council of British Columbia in allowing anonymous whistleblowers in Canada.

“Some leads will be dead ends,” Siegle acknowledged. “But we’re expecting that we will get a higher frequency of reporting.”

RECA conducted 1,074 professional conduct reviews in 2017 — its highest total ever — of which 41% were filed by industry members compared to 34% from the public. From the investigations, there were 11 letters of warning for unauthorized practices, 147 advisory notes, 91 letters of reprimand, 98 administrative penalties and 31 conduct proceedings.

In March, B.C.’s regulator launched its anonymous reporting program and is already seeing dividends.

“While still in its early days, the service has already had a significant impact,” said Real Estate Council of B.C. Executive Officer Erin Seeley, adding that nearly 300 tips have resulted in the opening of almost 100 files so far.

“Ultimately, we expect that the anonymous tip line will allow us to detect more offences, take action earlier and limit the consequences for victims,” she said.

Siegle is cognizant anonymous reporting may result in some false accusations, but noted RECA won’t begin formal investigations unless it has jurisdiction and finds sufficient evidence of wrongdoing.

He believes people often avoid reporting possible fraud out of fear of having to face someone they’ve accused or because they believe police won’t investigate smaller cases. Another barrier is industry members who may believe fraudulent consumers — such as those who falsify employment records — won’t be scrutinized.

“In that case, we still will work with law enforcement and let them know it’s a criminal event,” Siegle said. “We may find a pattern with industry members that may allow more investigating, or we may be able to find people who are providing false employment records.”

Whether the new program in Alberta results in reducing fraud remains to be seen, but industry members believe there will be benefits.

Success would go beyond simply catching fraudsters and reducing lender and insurer losses. Elevating professionalism and accountability in the industry benefits everyone on the right side of the law.

“The more I’ve been thinking about it, the more I think this is a big deal,” said Gord Appel of TMG The Mortgage Group and former president of the Alberta Mortgage Brokers Association. “This will make it a lot less onerous to report, and I think we’re more likely to see the reporting of questionable behaviour.”

“When you enable people to say, ‘I know about this situation and don’t have all the details, but believe the regulator should look into it,’ it’s a step to increasing professionalism in our business, which is absolutely critical to our survival,” he added.

After all, as Appel pointed out, the actions of a few tarnish the majority.

“In our business, the public thinks that a realtor is a realtor and thinks a mortgage broker is a mortgage broker,” he said. “They don’t care what company you’re at, if you’re a mortgage broker you’re all the same. If you have a bad experience with a mortgage broker, all mortgage brokers are bad. If you have a good experience with a mortgage broker, all mortgage brokers are good — until you encounter the one who’s not, and then they’re all bad.”

“If we don’t take steps to make sure we’re self-policing and enable RECA to do its job, then we’re working our way out of a job,” he warned.

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Last modified: November 20, 2018