There has been an increase in stolen mail. We know, because our positive pay exception reports grow exponentially when fraudsters steal title company checks and then use them to make counterfeit checks for various amounts, usually to purchase items on the Internet.

Fraudsters will contact the seller of merchandise on an Internet website. They create a check that looks like a title company check for much more than the sale price of the merchandise. They send the check via overnight delivery to the seller, with instructions for them to deposit the check and send any overage to their shipper via money transfer.

The seller deposits the counterfeit check and sends the money transfer. The title company's bank rejects payment of the check, since it does not match the positive pay record. The seller is out the shipping fee and the bank charge for processing a counterfeit item.

The fraudsters usually enter into 20 or more deals at a time, creating a unique counterfeit check for each transaction. It becomes an annoyance for the title company to reject the positive pay exceptions daily and to field calls from the Internet sellers who inquire as to why the check came from the title agent in the first place.

All of this can be avoided by securing outgoing mail until it is delivered or picked up by the postal worker. Also, for post–closing refunds, where the recipient is not expecting a check and would not know to report it missing, the funds should not be sent via check where the check could be potentially stolen from the recipient's mailbox.

Instead the refund should be direct deposited in accordance with escrow technical memorandum #72–2007 entitled Post Closing Refunds to Principals.