Everyone in the settlement industry has heard stories about the loyal and faithful bookkeeper/accountant who wrote themselves a few checks now and then and defrauded the company of hundreds/thousands/millions of dollars. Unfortunately, most of these stories are not urban legends, they’re true!
A recent Phoenix-Hecht study noted that “frequent reconcilement is often your last line of defense to prevent fraud.” Since the industry standard is monthly reconciliation, many agencies have only a dozen chances a year to discover fraud.
Sometimes fraud is detected by a ‘red flag’ that alerts agency management. Fraud investigator Rafael Toldeo, Jr. recalls a case involving a trusted manager in a multi-office title company who personally handled 50 to 60 closings a month for a major builder. “She added $100 to each HUD statement for prepaid taxes. She also did the monthly reconciliation eventually stole nearly $500,000.” The red flag in her case was that she was never absent from work and never took a vacation. She knew the theft might be noticed if anyone else looked at the accounts.
Peter Norden, a former First American Regional Vice President, says that check fraud is not limited to company employees. “Anyone with access to the company check stock, the cleaners for example, can lift a check and reproduce it. In a month, before the next reconciliation, they can easily clean out an account.”
AP Technology, a supplier of check stock and systems, offers four methods to help prevent check fraud:
- Use a high-security check printing system and, where possible, remote printing.
- Use high-security blank check stock which is devoid of all bank and company information.
- Create a Positive Pay partnership with your bank that validates each check it receives against a check issuance list you provide.
- Implement best practices for fraud prevention including daily account reconciliation.
Fortunately for the settlement industry there’s Rynoh, a complete settlement industry escrow account management system that includes daily three-way escrow account reconciliation and reporting combined with Positive Pay™ banking options.
Rynoh helps to:
- Immediately identify and eliminate defalcation and check fraud
- Eliminate disbursing errors
- Maintain accounts at an “audit ready” level every day
- Track revenue daily to prevent losses and increase profitability
Developed by a title company owner who understands the complex needs of the settlement industry it’s an affordable Web-based bridge application that integrates smoothly with all major settlement industry software including SoftPro. Rynoh is scaleable from small title firms with one or two escrow accounts to large multi-office firms with many escrow accounts and can grow with your business. Rynoh users are fully supported with customization, installation, training and ongoing support services.
For more information and to talk with current Rynoh users contact Dick Reass at 877-467-9664 or e-mail dick.reass @rynoh.com. Visit Rynoh at www.rynoh.com
RynohLive, 397 Little Neck Road, 3300 South Bldg, Suite 210, Virginia Beach, VA 23452