Living in the Digital Age is an exciting and special time for Escrow, but consider the following:
Your Buyer, Seller or Real Estate Broker just left your office with their Escrow Check in hand, but then they return a few minutes later to ask for a reissue or redraw, because:
- The check was dropped in the rain gutters and is unfit for deposit
- Your Customer tore the check when removing it from their closing package
- They request a change in spelling or names, such as a middle initial
- Any other reasons
As you know, customer service is very important to escrow, and generally we are very accommodating. If somebody asks for a redraw, why wouldn’t we? We can see the original check is wet, damaged, or the name may even really be misspelled, so there seems to be no problem, right? WRONG!
New bank advertising illustrates how easy it is to digitally deposit checks into bank accounts, by simply using a smart phone’s camera feature.
Chase Bank in particular allows for their customers to digitally take a picture of checks, for instant deposit. All one has to do is use their smart phone, and viola!
So what does this mean for Escrow? Because the person has the ORIGINAL CHECK to exchange, do we issue a Stop Payment? Do we keep the original check, and void it out in the escrow system, only to reissue a 2nd check to our happy customer?
Once the check has left your view, it is possible for this check to be digitally deposited without your knowledge, and it would be very easy for one to come back shortly there after, to ask for a new check (ie banking fraud).
Take this opportunity to review your company check re-issue policies. Talk with your Banker to learn what steps should be taken to prevent this new type of digital fraud, and learn how your bank policies apply.
Remember, in a digital age, it is possible for bank fraud to occur just by criminal use of a smart phone. For us in the Escrow industry, this means we must continue to be smart and proactive, to ensure the protection and safety which our customers expect, when one is using escrow services during what many call the most important transaction people face in their lifetime.