in this issue

The fax machine, whether it is the old fashioned version or an internet fax or e–fax solution, poses security risks when it comes to wire fraud, just like email. The connection may pose the security risk, the risk may be the lack of verification of the sender, or it may be where the transmittal is received. A seller on a recent transaction received a payoff statement from his lender. The seller was represented by an attorney. He emailed the payoff statement to the attorney.

The attorney responded with instructions to fax the payoff instead. The payoff statement was received via e–fax from the seller.

The law firm in turn provided the payoff statement to the settlement agent. The settlement agent placed the payoff statement in the file until it was ready to close. On the day before closing the settlement agent confirmed the contents of the letter with the payoff lender. The escrow officer did not confirm the wire instructions contained in the payoff statement, since the title company sends hundreds of payoff funds to the lender every business banking day.

The settlement agent proceeded to post the outgoing payoff wire in the amount of $326,939.58 to the production system. The outgoing wire was transmitted to the accounting center for processing. Jayne Welch, the accounting center representative, received the outgoing wire for processing. She had read the April 2018 edition of Fraud Insights and knew payoff funds were now the target of the diverted wire scam.

Jayne paid close attention to the bank wire information as she processed the outgoing wire. While processing she noticed the account number the funds were being sent was not the account she normally used when processing wires for this particular payoff lender.

Jayne stopped. She picked up the phone and called the bank the wire was being sent to. She wanted to verify the account truly belonged to the payoff lender. The bank confirmed her suspicions. The account did not belong to the payoff lender. Jayne rejected the wire and called the settlement agent to let them know the payoff funds would not be transmitted until the wire information was correct.

Jayne's close attention to detail did not go unnoticed. The Company is so proud of her integrity and unique ability to detect wrong doing, they have sent her a letter of recognition along with a check in the amount of $1,500.


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