Bulletin: NY000707

Stewart Title Insurance Company has recently advised its agents and offices of the increased occurrence of payoff checks stolen from un-monitored overnight delivery boxes or “drop boxes”. Stewart strongly recommends that its agents and offices deposit overnight payoff transmittals or any closing associated checks to controlled locations, meaning an official office/store, or having the service’s personnel pick up the package from your offices.  We also strongly recommend, in the instance of a payoff check, that you obtain immediate verification of delivery from the overnight service and confirm receipt of the package by the payoff bank.

In addition to the theft of checks from remote drop boxes the criminals will “wash the check”.  Check washing occurs when a stolen check is altered to remove the payee or amount and re-written to a new payee or a higher amount.  Here are some tips to prevent check washing:

Checks should have security features like watermarks, special inks (indelible ink), or microprinting. All fields on the check should be filled out completely and legibly to eliminate any blank spaces. This includes writing out the amount in words and filling in the memo line.  Mail checks securely by dropping into monitored overnight/ post office mailbox-post office counter using security envelopes.

Monitor bank accounts regularly using positive pay programs that will stop not only a change in the amount, but also a change in the payee.  Use electronic payment methods when possible.  Finally, notify your bank if you suspect a check has been stolen or altered.

In the event you have any questions regarding the above, please contact Stewart Title Legal Department at 212-922-0050 and speak with any Underwriting Counsel.

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