Bulletin: NC2008001

When insuring a transaction where the seller, buyer or borrower is a corporation please remember to verify the authority of the person with whom you are dealing by contacting the corporate office. This is an area that can cause frauds resulting in large losses due to the general size of these transactions. This is especially true if the corporation is an out-of-state corporation and is being represented by a local "agent". In some cases, the agent may have no authority whatsoever and the corporation is not aware of the transaction.

This works on the same principle that Lynn Wilburn described in his TIPS presentation this year where you have someone trying to borrow money against property that is owned by an out-of-state owner and the title agent/attorney does not meet with the representative or does not verify the authority of the individual to sell or mortgage the property.

In other words, be suspicious of any such transaction and ask questions so as to avoid potential fraud.

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