Posted On: November 15, 2016

Marilyn Olliver, Division Manager, Vice President of North American Title Company, was covering the desk of a manager out on a much deserved vacation. One of the files she worked on was a sale where the buyer obtained a FHA insured loan. The seller was out of state and had already signed all of their closing documents, and provided written and signed Disbursement Authorization Instructions for the proceeds from the sale.

The buyer’s loan documents came in. The buyer signed off on the loan documents and left for the bank to initiate a wire of their closing funds. Since the loan was a FHA insured loan a few of the documents required the seller’s signature. An assistant at the office emailed the loan documents to the seller to sign.

The seller emailed the assistant back stating she wanted to change the account where her proceeds would be wired. The body of the email included the new wiring instructions. The assistant replied with a blank copy of the Disbursement Authorization Instructions and asked the seller to complete them, then send them back with the other documents.

Marilyn was copied on the email. She noticed the account name for the new bank account was a company name and not the seller’s name. Marilyn notified the seller the proceeds must be wired to an account in her name individually. Something about the email bothered Marilyn so she reviewed it closer.

Marilyn looked carefully at the email address comparing it to the one in the file and discovered the address was not the same. It was very close, but it was not the same. A fraudster was “spoofing” the seller’s real email account. Marilyn picked up the phone and called the seller at a trusted phone number. She left her a voicemail and asked her to call regarding her closing so they could finalize everything.

While Marilyn waited for the seller to call back, the fraudster sent in revised wire instructions and continually asked for confirmation the wire was sent. The seller returned Marilyn’s call and confirmed she had not sent revised instructions. Marilyn explained it appeared fraudsters hacked her email. The seller was very grateful North American Title Company caught this and thus protected her $246,000 in proceeds.

This story, however, did not end there because the fraudster did not let up. He again completed another Disbursement Authorization Instruction and signed it electronically in an attempt to divert the wire transfer. Furthermore, the fraudster electronically signed or forged the seller’s signature on the loan documents Marilyn provided and returned them. The fraudster kept asking for confirmation the wire was sent.

Marilyn replied requesting the fraudster call her. The fraudster replied he was in meetings all day but she could always reach him by email. She replied she would not be able to send the wire until he called her. He did not respond.

Marilyn shared the emails with her corporate offices. Her corporate attorney then contacted the bank where the fraudster attempted to divert the proceeds. The attorney alerted them their account holder was up to no good. The bank’s fraud department is investigating the account.

Marilyn sighed in relief. Thank goodness she took the time to trust her gut and review the email. She halted a large loss and a potential claim to the Company’s errors and omissions insurance policy and saved the customer.

In hindsight Marilyn realized how difficult it was to detect forged documents signed electronically since comparing to live signatures she had was impossible. Marilyn said, “It is so important for everyone to be aware of all the fraud schemes out there today, and to pick up the phone and call your customers to insure that all instructions are correct instead of taking the easy route and emailing.”

North American Title Company is a title agent for the FNF Family of Companies. National Escrow Administration completely agrees with Marilyn and thanks her for sharing her story. Although we have published many other articles in previous issues, this one features a new twist — the fraudster actually forging the seller’s signature to other documents. Thank you Marilyn!

via FNTGFlorida