Fraud Detection Technology

An escrow officer stops a fraudulent transaction from closing using a special ultraviolet light device.

Sheryl Stone, an escrow officer and branch manager for Fidelity National Title in Phoenix, Arizona, used her keen observational skills to prevent a fraudulent transaction from closing. A borrower had come into the office with his loan officer to sign refinance documents. At Sheryl's request, the borrower presented his identification, an Arizona driver's license, prior to signing the loan documents. Sheryl immediately thought the license looked suspicious.

She and a co-worker held the driver's license under their Fraud-Fighter counterfeit detection device, which uses ultraviolet light to scan and detect counterfeit cash, credit cards, money orders, drivers' licenses, passports and other fake IDs. If the state abbreviation or state seal appears on the front of an identification card when held under the light, then the card is legitimate. If the letters do not appear, the card is fraudulent.

The state of Arizona seal did not appear on the borrower's card, which meant the license was fake. Sheryl and her co-worker took the next step and called the Arizona Department of Motor Vehicles, who confirmed the license number was invalid.

Sheryl informed the loan officer and borrower that she would not be able to proceed with the signing. She handed the identification card back to the borrower and told him it was fraudulent. Neither the borrower nor the loan officer showed any surprise or remorse. They just got up and left the office - after asking Sheryl to validate their parking ticket!

Sheryl received a $500 reward for her detection of a fake driver's license - and the ultraviolet light device made it easy! For less than $100 per unit, FNT operations in Arizona have equipped their escrow branches with this special device. Now they can determine whether the identification is fake in seconds!

Arizona operations settled on this device versus similar products due to volume pricing discounts available through the manufacturer. These machines are available at www.fraud-fighter.com. To learn about other identity theft prevention products, go to www.nationalnotary.org, click on "Education and Training" and then click "ID Theft Solutions."

Moral of the Story
Always ask for the identification of the signing party immediately, so your valuable time is not wasted on a signer with invalid identification. If fake identification is presented to you, notify the real estate professional representing the principal first, either in person or on the phone. Then, either you or the real estate professional has to immediately dismiss the signing party so employees do not find themselves in a potentially harmful situation.

After the signing party has left our offices, resign from the transaction and return all original documents and monies to the depositing parties with a resignation letter. Make your local management team members aware of the situation so they can share the names of the principals among our family of companies in your region. Criminals are not often aware that FNF is represented by multiple branded companies - we want to avoid repeat offenders.

Dearly Departed

A relative of a deceased property owner poses as her daughter and attempts to refinance the property using an Affidavit of Heirship.

A loan officer opened a new refinance transaction with one of our Chicago Title operations in Portland, Oregon. The property owner was deceased. There was no probate, but the deceased owner left a will. In the will the deceased woman left her personal property to her sister and her real estate to a woman who claimed to be her daughter.

The "daughter" was the borrower who was attempting to refinance the property. However, the will failed to name the heirs or define the relationship between the deceased and the borrower - the "daughter" wanted to close based upon an Affidavit of Heirship, without a probate.

The situation sounded suspicious, so Gregory Nelson, regional legal counsel for Chicago Title, investigated the matter by first obtaining a copy of the deceased owner's obituary. The obituary stated that the property owner's only son had died two years prior and she was survived by three grandchildren. A daughter was never mentioned!

Further investigation revealed that the woman claiming to be the "daughter" was actually a great-niece of the deceased. The niece intended to take the property (and still might do so) without notifying the legal heirs. Greg concluded that because the last will and testament did not name the heirs, it was likely invalid. We cancelled our escrow transaction.

Moral of the Story
Our operations deal with false claims to properties of deceased parties on a regular basis. Without the court overseeing the proper distribution of assets, the risk to the insurer is too great to undertake.

Account Number Pilfering

An employee's detective work uncovers an outside notary fraudulently using an FNT FedEx account for personal use.

Kathy Greene, an accounts payable clerk with Fidelity National Title's Tampa district, discovered that an approved notary who performed frequent sign-up services on behalf of the company was using its Federal Express (FedEx) account number for personal business.

On November 29, 2006, Kathy received a call from FedEx asking for the phone number of a recipient due to an insufficient address. Kathy asked for the name of the sender and was told there was no name entered on the air bill other than Fidelity. Because Kathy's operation requires the employee's name and the transaction number to be printed on all outgoing packages, she was immediately suspicious.

Kathy confirmed the account number was indeed Fidelity's. She asked to have a copy of the air bill faxed to her in order to identify the handwriting. When the air bill arrived, no one in Kathy's office recognized the handwriting. She called FedEx and requested that the package be returned to Fidelity so she could identify the sender.

In the meantime, Kathy tracked the package via the FedEx Web site and found it had been shipped from Miramar, Florida. Again, Kathy was suspicious since her operation does not have any branches in the Miramar area. She felt certain that the package had not been shipped by a Fidelity employee.

Kathy called FedEx to report the possible fraudulent incident. The customer service representative told her that tracking numbers are sequenced in such a manner that the sender’s previous shipments can be easily traced and identified. The customer service representative provided the name of the sender, Jeanette Estrella, and informed Kathy that prior packages had been shipped by Jeanette using the Fidelity account.

Once Kathy learned that Jeanette was an approved notary, she assumed the package being returned to Fidelity contained closing documents. When the package arrived, Kathy was surprised to discover a small tote bag inside. Kathy gave the package to her district manager for follow-up. The district manager called Jeanette, who denied sending the package and living in the Miramar area. In fact, she said she hadn’t done sign-ups for Fidelity for quite some time.

In the meantime, Kathy learned that Jeanette had shipped a total of eight unauthorized packages between October 31 and November 29 of that same year. Kathy reported the incident to BancServ, FNF's notary company, who discovered Jeanette had been operating an eBay business on the side. Jeanette had been using account numbers from Fidelity and other title companies to fulfill shipments.

Moral of the Story
Review your operation's overnight delivery invoices regularly and require that employees include the sender's name and transaction number on all deliveries originating from your location.