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Article

Better local government data security can prevent property fraud

Better local government data security can prevent property fraud

  • Written by Michael Halpern
  • 30th September 2020

For local governments, there are many benefits to sharing data and being transparent with your constituents, including building trust within your community, increasing community engagement, educating your constituents, showcasing reform, and empowering citizens. Data and data-based decisions are new buzz words and rightfully so.

However advertisements of vacant and abandoned properties creates new problems for the community, as outlined in a recent article by the Better Business Bureau (BBB).

On July 16, the BBB issued a news release discussing various scams involving the utilization of vacant home titled, “Scammers steal addresses of empty homes for rental cons, phony stores and more.” The article discusses how scammers use fake addresses to “prop-up” their scam and several other methods of scamming unassuming renters.

As the BBB article describes, the scammers obtain addresses of vacant properties from the internet and repurpose the address, and in some cases the property, for exploitation and fraud, such as the growing trend of deed fraud.

In late August, reports out of California  discussed vacant homes being utilized for unemployment insurance fraud, which has resulted in a state audit and at least one arrests.

There are endless sources of information for these scammers, and local governments are not innocent or exempt from arming these scammers.

Since the inception of vacant property registration ordinances, local governments wanted data and information to improve efficiencies while protecting their first responders and community. This need for safety led to physical “signage” requirements and online vacant property registries – both of which are easily accessible by the public.

Many local jurisdictions have laws requiring signage to be posted and visible from the street for all vacant properties. The signage requirements often require large font clearly stating the property is vacant and contact information for the owner or responsible party.  The intent of the law is to ensure the local municipality knows of the safety concern and who to contact should the property require attention; however, the requirement advertises vacancy and often invites more crime. Any reward of transparency to the neighbors seem to be outweighed by the risk of increased crime.

Many local municipalities also require registration of vacant and/or foreclosed properties, which are mostly completed online, thereby easily facilitating publication if so desired. Similar to physical signage posted at the property, this publication, though creating transparency also provides a second avenue for advertising vacancy. At one very large municipality, this concern was raised at a public meeting discussing implementation of an online registry for vacant properties along with publication of the address, in which a staff member responded to the concern with, “criminals do not have access to the internet.” As the BBB advisory states, that is definitely not the case.

A quick review of published registries and code enforcement violation databases, for several large cities resulted in confirmation of property address, date of vacancy, and conditions at the property, like “unsecured building” or “abandoned” – enticing information for the criminal element. Information like “unsecured building” imply persons wanting access would not even have to break a window or door to gain entry.  Information like “Active” or “Violation Sent” confirms the status of vacancy is still current.

Information gathering and establishing responsible parties of vacant properties is beneficial and encouraged; however, finding the right balance between transparency, and mitigating potential risks is critical as the criminal element gets more sophisticated. Leveraging experts and considering outcomes of sharing too much information with the general public can help local governments strike a balance.

When deciding what information to make readily available, work with internal and external partners that understand the objective, goals, and potential ramifications. Investing time in vetting and micromanaging who needs to receive the information will mitigate your risk drastically.

Michael Halpern is president and founder of MuniReg, a 3rd Party administrator of municipal property registries.

Tags: Administration News Administration News Article

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