- November 13, 2014
- All Issuing Offices
- CLAIMS AVOIDANCE - Check Fraud Involving Large Overpayment
We recently became aware of a check fraud scheme in which a property buyer, purportedly from China, defrauded a New Mexico title agent of more than $400,000. We also received information indicating that the same scheme was recently attempted - unsuccessfully - at one of our New Mexico issuing offices. The thwarted attempt of this scam involved the use of a fraudulent Canadian Bank Check by an overseas buyer.
The successful perpetration of the scheme in New Mexico involved someone representing themselves as a buyer, purportedly in China. That person contacted the title company regarding the purchase of a property. The title company agreed to coordinate the sale of the property. A $12,000 down payment was agreed upon. However, the title company received a check for more than $400,000. The title company deposited the check at its bank, and, according to the police report, the check was cleared by the title company's bank.
The title company received two emails from the buyer requesting a return of the excess funds. The title company sent the buyer $250,000 and then another $100,000. However, after transferring the funds to the buyer, the title company was notified by its bank that the check it had received and deposited was a forgery.
Please be vigilant regarding large overpayments by a buyer and requests for large refunds. Although the reported occurrences involve New Mexico title offices, the scam can be undertaken anywhere.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- SLS2011005 Disbursement Practices: Good Funds vs. Collected Funds [Revised 04-27-12]
- Underwriting Manual:
- Exceptions Manual: