- January 21, 2010
- All Issuing Offices
- Certified Check Scam
Please be aware of a series of scam operations that have surfaced. Transactions start out as sale/purchase transactions involving one or more foreign nationals as purchasers, generally carrying some honorific title such as Doctor or Prince. The "purchaser" does not appear in person, and generally makes contact with the listing broker who writes up the transaction. After delays over various issues, funds are presented in amounts substantially larger than called for by the transaction and for immediate closure of the transaction and immediate refund of the overage by wire transfer to (generally) an account in an overseas bank.
The "funding" is accomplished by means of an "official" check from a recognizable U.S. financial institution or a Canadian "institution" with a plausible name. The document is bogus, and is either a counterfeit or has been stolen from the alleged institution of origin. The item is, of course, uncollectible. The item is usually delivered by courier or messenger, to avoid going through the postal system, although we have seen one instance of the use of the Canadian postal system. In the instances seen, the item is delivered on Friday afternoon, with the demand for immediate refund by wire.
When confronted with such circumstances, or circumstances even vaguely resembling these, stop and think. Then take the following steps, in sequence:
1. Notify management immediately of the circumstances and the picture that they present. If management is not available, contact underwriting personnel immediately.
2. Deposit the item in normal course of business.
3. DO NOT MAKE THE REFUND OF THE APPARENT OVERAGE.
4. Confirm with your bank that the item is genuine and that the funds represented have in fact been collected by your bank and are available for withdrawal. DO NOT DISBURSE or otherwise close the escrow UNTIL YOU HAVE MADE THIS INQUIRY AND RECEIVED CONFIRMATION BY FAX OR EMAIL FROM YOUR BANK.
5. When you have received confirmation of good funds, you may disburse and otherwise close in the normal course of business.
Be sure that you have documented each step of the transaction. Save the envelope in which the money item was received, even if apparently blank on the outside. Be very careful, and do not cave in to pressure, yelling or threatening on behalf of the parties purportedly furnishing the funds. Make sure that management is kept aware of each step, and be prepared to stop.
We remind you that settlement services are outside the scope of our agency contract. Information, interpretations and views of Stewart Title Guaranty Company regarding the matters discussed above are offered as a courtesy only and expressly do not constitute legal advice. You may or may not agree with or follow such views and interpretations. You are advised to consult your own legal counsel in making all decisions regarding laws and regulations pertaining to escrow and closing matters.
If you have questions relating to this bulletin, please contact Stewart Legal Services or your local underwriting personnel.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.