“Fraud is prevalent in every part of society. We have crooks of all sorts come out of the woodwork when there is a lot of money involved,” said Juliana Tu, president, Viva Escrow! Inc. and president-elect, the California Escrow Association, while discussing various types of fraud conducted at the closing table and the importance of staying alert during the escrow process.
During the National Settlement Services Summit (NS3) on June 6-8, in Detroit, Tu and Art Davis, executive director, American Escrow Association will review real-life cases and cautionary tales of escrow fraud, as well as non-digital threats and the appropriate standard of caution.
“Wire fraud has been an important problem this last year, but fraud in general has always been a headache for us settlement agents, as you can imagine,” Tu said.
During her time as an escrow agent and company owner, she’s seen or heard about many types of fraud that have happened during the escrow process, from the man who passes his girlfriend off as his wife to sign a quitclaim deed, to being provided totally fraudulent documents, being given fake cashier’s checks, and request to essentially launder money. Tu said the risk has been heightened in an age where we rely on email communication and email accounts are being compromised daily.
“It’s to a point right now with all this email fraud that we, first of all, do not give out our bank account numbers and secondly, if I’m going to wire to anybody, whether it be to my title agent who handles the payoff or to my seller in China, I literally call them,” she said. “I will get on Skype and I will call China at 5:30 in the afternoon because of the time difference and ask them, ‘Please confirm your wire instructions. I’m going to be wiring to you, you need to let me know you got this.’ ”
More than learning from the examples of fraud that can be perpetuated in escrow, Tu said she hopes attendees walk away with three pieces of advice:
“Trust no one, question everything and slow down,” she said. “Too many mistakes happen when we are rushed to closing. In California, we don’t do round table closings; we get everything in advance, and then on the day of closing, we record documents and disburse funds. That’s how it is in California. We are constantly forced into a rush closing. Clients say, ‘I need to move in this weekend, please record,’ or ‘I need to buy another property, please wire me my net proceeds so I can wire to my other transaction.’ So much is on a rush and when you are rushed, you make mistakes. So don’t trust anybody, question everything that happens and slow down and make sure you are doing it correctly. I think that is the thing that I really hope that everybody will take away.”
For more information on the 2018 NS3, including the agenda and a list of speakers, click here. You can register for NS3 online or click here to get information on how to register via mail, fax or phone.