Title Tip – FRAUD – an ongoing problem

FRAUD is something we have always had to deal with, but it is a continually moving target.  It seems like “the bad guys” are always creating new ways to cheat someone out of their money – and it is a lot of work trying to keep up with their newest ploy.

When it comes to detecting and avoiding fraud, we have the following tools that we use:

  • Our own instincts – some things just don’t pass the “smell test”.
  • YOUR instincts – we need YOU to be on the lookout as well.  Is something seems funny, check into it more.  And don’t let a “smooth reply” divert your attention from something suspicious.
  • Our underwriter – since they deal with agents all over the state as well as the country, they are often alerted to problems way before they make their way to the Midwest area.  Often a “newest ploy” will start up in a specific geographic area and will move to other parts of the country.  As our underwriter sees something happening somewhere else in the country, they alert us to a potential scam that we might encounter.  We get these alerts all of the time.

We were personally the target of a scam where some money was wired into our trust account, for a future closing on the purchase of a property.  When the purchaser asked us to wire some of the “excess funds” he had deposited with us (he had wired us more than needed for the purchase), our closer became suspicious.   Some further investigation with the bank revealed a problem with the funds in our account and the bank (in Canada) that had wired the money.  In the end, the FBI got involved and the customer, as well as his bank were put on the “alert” list.

The intention of this action – we would have wired out good funds from our trust account, before realizing that the funds wired into us were NOT good.  The customer never intended to purchase the real estate in the first place: as soon as it was discovered that the funds were bad, his real estate purchase would have been voided.  However, had we wired out the “excess funds” from our trust account – he would have had that money sitting in an account in Japan and there is no way we could have retrieved those funds.

Needless to say, this transaction did not complete.  The alertness of the closer saved a lot of pain for everyone involved.  YOU can help us detect and avoid situations involving fraud.  Working together as a team is the best defense we have.

Disclaimer – this information is NOT legal or financial advice, and should not be used as a substitute for the same.  It is offered for informational purposes only.  Many different factors can influence the proper course of action for a particular situation.  Please seek the advice of a qualified professional for guidance with your specific transaction.