Leveraging Public Records During Due Diligence Procedures

Every business organization needs to ask itself certain questions about fraud potential. For example:

- How concerned are you with fraud exposure within your organization?

- What type of consequences could occur if a potential fraud was to take place?

- What steps has your organization taken to mitigate the risk of a potential fraud?

Fraud exposure can cripple an organization. It is important that each organization look at ways it can assess its own level of fraud exposure and develop a set of policies and procedures to help mitigate fraud risk. This article will outline several steps organizations can take to better understand those the organization is conducting business with.

Access to Public Records:

Does your organization leverage public records? Specifically if you needed access to public records, such as court and bankruptcy records, would you know how to do so? Would you know how to access these types of records in a short period of time? There are many reasons to access such records, and accessing these records can help the organization better and understand who you are doing business with.

Know Your Business Partners:

Who are you really doing business with? Consider the risk each day companies expose themselves to during regular business transactions. Consider the risk companies expose themselves to by not performing due diligence against organizations and people they do business with. By incorporating the added step of domestic and international due diligence procedures companies are able to query against the following types of records: lawsuits, judgments, UCC filings, watch list searches, media publication searches, bankruptcy records, tax liens, and more.

Can you think of other instances where due diligence can be of added value within your organization, or market sector? Let’s take a moment to review risk within the real estate industry.

Fraud Risk within the Real Estate Industry:

The mortgage boom and the subsequent fallout have resulted in particular attention being paid towards fraud risk within the real estate industry. Consider the impact of an appraisal fraud within a real estate transaction. Those lending money need the assurance that the appraisal of the property they are about to issue a loan for is correct and is not inflated to provide higher selling commissions. By performing due diligence and checking professional credentials the lending organization is able to have an increased understanding the individuals that are involved in the transaction they are reviewing.

Current events have illustrated that mortgage fraud is a dangerous type of fraud that can have a trickle down effect within the economy. Today the need to mitigate real estate fraud could not be greater. Technology has made it easier to understand those you are doing business with in both the real estate industry and other industries.

Leveraging Technology to Access Records:

Technology has made advancements into how one can find public records. Gone is the need for trips to city hall or to a local public library. Advancements in internet technologies has allowed for an additional layer of transparency within business. Information such as SSN verification services and id authentication services can be provided seamlessly and on demand thanks to advancements in database technologies. For the individual that is concerned about those he is partnering with on a real estate transaction, or other type of business relationship he now has an addition set of solutions at his disposal to help mitigate fraud risk.

The sensitivity for fraud exposure goes far beyond the real estate industry. Think of various organizations and verticals you and your company works with on a daily basis. It is important to have the right tools to refer to when the topic of due diligence and fraud exposure arises. There is an abundance of information available that companies can reference. The next time the topic of fraud exposure is discussed within your organization remember to consider looking to the technologies available to best serve your organizations due diligence needs.