Fraud Prevention in Action: Coastal Title Thwarts Deceptive Seller
Brianna Steel is a seasoned escrow officer, having worked for a variety of title companies throughout Florida. Her years of experience served her well recently when a suspicious transaction came across her desk at Coastal Title Insurance. By trusting her instincts, collaborating with her team, and following best practices, she was able to stop a fraudulent deal from going forward. She was recognized by Alliant National through its crime watch program, which incentivizes anti-fraud efforts by offering agents a $1,000 reward.
Numerous red flags
At first, the transaction in question appeared to be a normal purchase order. Initiated by someone claiming to be “a representative” of the property owner, Steel and the rest of the Coastal Title team got started on the file as soon as they received a request from the lender.
Yet according to Steel, it didn’t take long for red flags to emerge:
- Red flag 1: The contract was missing a signature. The representative promised both Steel and Coastal Title that it was coming, but excuses kept piling up, such as the seller being unavailable. While this was suspicious, Coastal Title continued working on the file to ensure that there were no delays, while repeatedly asking the representative to complete the paperwork.
- Red flag 2: Steel and Coastal Title were asked to “split” the proceeds with non-owners/non-lien holders.
- Red flag 3: Document signatures did not match other signatures available in the public records – a huge warning sign.
- Red flag 4: All communication was conducted through one person claiming to be “assisting” the parties involved in the order.
Further complicating matters was questionable behavior on the part of the transaction’s so-called “representative.” For one thing, the representative instructed Coastal Title to wire the transaction payment to several different accounts – including one belonging to the representative – which Steel responded that they couldn’t do.
All these suspicions were eventually confirmed when Steel made a call to the supposed seller. The property’s owner informed Coastal Title that the person who had been claiming to be her representative had been terminated and had no authority to speak for her on anything.
A strong team and the right policies
In reflecting on this experience, Steel had several insights. She noted that fraud can only be prevented through productive collaboration.
“At the end of the day, it comes down to talking with everyone in your office and sharing any concerns or even weird feelings about a file,” Steel said. “We are also very strict on following the rules and guidelines for preventing fraud.”
Steel listed some of Coastal Title’s fraud prevention policies:
- Never accept wire instructions via email.
- Never send unsecured wire instructions. No exceptions. If a client gets upset, explain that the policy exists for their protection.
- Call all clients and speak with them directly for introductions. This helps ensure communication with the correct person. Steel noted that a lot of fraud takes place via email and fraudsters try to not answer the phone.
- All employees must complete annual Continuing Education classes on fraud, even if they are not licensed.
- Inform colleagues when a phishing email is received. This helps all staff members avoid accidentally opening a malicious email.
- Show bogus emails to other employees so they can see things in real time. This has advantages over simply looking at fake emails in lender portals.
Another integral part of this collaboration involves Alliant National.
“Sometimes we are on autopilot and overlook the small red flags and warnings,” Steel noted, adding that Alliant National’s Crime Watch program “incentivizes people to take a closer look at their day-to-day tasks.”
Fighting Fraud: Challenging and Rewarding
As we’ve seen, beating fraudsters at their game is not easy, and it is often only possible through strong collaboration. Yet the time, effort and energy are worth it in the end. Thinking back on her experience, Steel noted that fraud isn’t always obvious.
“It’s surreal and infuriating […] but it’s also not as black and white as we would like to think.” Steel said. “Florida has an aging population and a lot of vacation homes. It is not uncommon for someone to be ‘helping’ a seller through the process. But it is also extremely rewarding to stop these transactions and to protect the real seller and future buyers.”
That’s one reason why Steel was eager to participate in this blog. By sharing information on best practices for protecting transactions, she can continue the collaboration far beyond the walls of Coastal Title. When asked if she had any final advice for title professionals involved in anti-fraud efforts, she shared:
- Trust your gut and talk with your team.
- If you have an intake person or processor complaining they can’t get a seller on the phone, listen to them.
- Look at the signatures on the contract and the last recorded document. If it was e-signed, make sure the email address on the verification is the same you are using.
- If you have a suspicious file, ask for someone else in your office to look at it and see if they notice the same inconsistencies.
- Don’t “call out” the person that you’re concerned about; instead, ask questions and play dumb. See if you can trip them up. If fraud is confirmed, share the information with your whole office and all your underwriters.
- At the end of the day, knowledge and awareness are key and will make all the difference.
If you want more information on how Alliant National incentivizes agents to detect and prevent fraud, check out our crime watch program.
Tags: crime, crime watch, florida