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Online auction sites (such as eBay or Craigslist®) benefit consumers and merchandise re–sellers, by helping them find one another and creating a venue for an exchange of goods and services. The sites also create opportunity for fraud, since there is no face–to–face interaction between the buyer and seller.
The names of our various Companies have been used repeatedly by online auction buyers in an attempt to syphon funds from sellers. Currently the Companies under attack by online buyers are Alamo Title and Fidelity National Title. These online purchases are not real estate related. Here is how the deal goes down…
An online buyer is the successful bidder or purchaser of high ticket merchandise, typically sold at $1,000 or more. The buyer sends a check via overnight delivery to the seller of the merchandise.
The buyer uses someone else's overnight delivery account to ship the payment — here they use an independent escrow company's overnight carrier account number. The check exceeds the amount of the sale price.
In this instance the item purchased online was a 1913 brass cash register which sold for $1,000. The check arrived at the seller's residence in the amount of $2,550 purportedly from Alamo Title. The check looked legitimate, but why did it exceed the sale price for the merchandise? The seller received the following (rambling) message from the buyer:
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Good Evening,
How are you doing today and hope you are having a wonderful week? I'm sorry for the delay of payment once again ,I sent the payment to you through overnight courier service , Here is the overnight courier's tracking 534941315010211 thanks for the prompt response and honesty towards this transaction so far.
The movers fee has been added to the payment sent to you as i told you initially that the movers fee will be included in the payment, the overpayment is meant to cover the cost of shipment for the item alongside my other properties including tax and insurance.
Please upon the cash of the check, deduct the money for the item purchased from you and make the rest fund available to the movers that will come and pick the item up at your place via money transfer at any of their office near you or grocery store and get back to me with the money transfer details gotten after sending the funds (as it appears on the receipt) so i can forward it to my movers as confirmation of payment and they can schedule for the pick–up at your location ....
To send money via money transfer attracts little charges so you are to deduct the money transfer charges from the the money you are sending to my movers and also deduct $30 for yourself (meant for any hassle or run around during the process of getting the check deposit and money transfer).
Once you receive the check from the post i want you to go and deposit the check into your bank account and take out the movers fund and send it to them as soon as possibleHere is the movers information Below.................
Receiver's Name:
- Ricardo Wall
- 4240 Grand Avenue,
- Stanley, WI 54768
Kindly get back to me with the Money Transfer details .
- Sender's name and address (as it appears on the Money Transfer receipt)
- Money transfer reference number (8 digit numbers)
- Actual amount sent after deducting the $30 and transfer charges.
What's your schedule regarding the pickup of the item as i have some other properties to be moved alongside.Hope i can trust you with the overpayment ? Your Honesty and transparency will be appreciated.
Best Regards. Smiths (sic)
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Out of curiosity, the seller decided to contact Alamo Title to see if the check was good before he deposited it at the bank. After checking their escrow production system, the staff at Alamo confirmed the check was counterfeit. The seller cancelled the online transaction and re–listed the item for sale.
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MORAL OF THE STORY
Many times the online merchandise sellers deposit the check, cross their fingers and hope the check clears the bank. These checks are counterfeit and have been stopped 100% of the time by the positive pay protection we pay for on all Company escrow trust accounts.
In all cases thus far, the sellers have not paid the shipping bill or released the merchandise prior to discovering the check is counterfeit and they have the option to list the merchandise and sell it again.
Because our accounts have positive pay features, our offices are not harmed in this type of fraud, other than the annoying number of phone calls and emails received by the sellers attempting to discover whether or not the payment is legitimate.
The buyers intercept the Company's banking account information from wire transfer instructions and from checks sent out in connection with the settlement of real estate transactions. Therefore counterfeit checks do contain the Company's actual bank account number.
Each item deposited is processed and rejected by our accounting staff. This emphasizes the necessity of making sure we are looking at our positive pay exceptions every morning. If we were to miss one, the consequence would be that it would get paid. In some cases, the counterfeit checks have been so voluminous (more than 100 counterfeit checks), we have had to close the trust account and open a new account.
If you are contacted by an online seller to verify the issuance of a check they have received ask them to scan and email the check so you can easily identify if it is (or is not) validly issued. Be sure to let them know if it is or not. Then scan a copy of the check to us at settlement@fnf.com, so that we can warn the trust bank of the activity and track the volume.
The company whose overnight delivery account number is used without their permission is the one unwitting party to the fraudulent transaction monetarily harmed — that is, if they don't recognize and dispute the charges with their carrier. If they do recognize and dispute them, their carrier will require, at a minimum, the account be closed and a replacement account opened.
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