I am reblogging this because I believe this is critical information for Title Companies in the Ann Arbor area to know. I also recently learned that a large brokerage in Ann Arbor had just started doing direct deposits for their agents.
I had not heard of this latest scam. But, can't imagine as a business owner having my computers and banks accounts frozen while the issue is tracked down.
I am also NOT sure what the solution would be unless a phone call would have verified that the builder had sent a new email and a new bank account number.
What are your suggestions?
Having An Unsecured E-mail Can Cost Your Clients Lots Of Money - It know this seems like it's not possible, but it did happen here in Nashville, and I'll leave the names of the parties out, because they are part of a criminal investigation.
A typical closing is scheduled on Friday, it's a new construction home and the agent representing the builder has a long term relationship with the title company handling the closing for both sides. On Thursday, the title company receives an e-mail from the realtor representing the builder with instructions on where to wire the proceeds of the closing when they are available. Later that day, they received another e-mail from the same realtor saying that he had made a mistake, and here is the correct account information. It's a typical request, so nothing is questioned.
The realtors e-mail had been hacked at an earlier time, and the hacker had just been waiting for the right opportunity. This was it. They opened a new account at a bank in the name of the builder, and when the funds were wired they immediately moved the money to an account in Russia.
On Monday, the builder called the title company to find out where his money went, and they said per the realtors instructions, the money was wired it to his account. Since it was over $100,000 everybody was in a panic.
But it gets worse. When they report the theft to the police, the Secret Service and FBI get into the process, and the first thing they do is freeze all accounts, take all the computers, basically shutting down the company until they can insure that the title company employees were not involved with the theft.
Is this ugly or what? It all could have been prevented with a secure e-mail.