The process of buying or selling a home can be extremely stressful and complex, but imagine the stress that would bubble up if your money were transferred to scammers in another country instead of the settlement company or trust company when charged. Here`s the story of a phishing email that cost a few of their homes and left them fighting for months to recover hundreds of thousands of lost cash. BAFT, the global banking subsidiary of the American Bankers Association, today released model fraud compensation agreements that allow member banks to attempt to recover funds fraudulently transferred from one customer`s bank to another. The documents, which are only available to BAFT members, contain annotated and fillable versions of the full indemnification and limited liability agreements that banks can select based on their needs. The fraudulent transfer instructions were apparently sent by the hackers through the settlement office. Charisse Castagnoli, an associate professor of law at John Marshall Law School, said banks have a fiduciary duty to their customers to comply in good faith with their requests and, as such, they tend to be very nervous legally when working with another bank to cancel payment orders from one of their own customers. The indemnification agreement is usually requested by the bank that received a fraudulent transfer, Castagnoli said, and it requires the responding bank to assume any responsibility for any fees the requesting bank may incur later if the account holder who received the fraudulent transfer decides to dispute the chargeback of the payment. The attack on Niles Nursing Inc. is a classic example. On Monday, December 17, 2012, computer scammers with the controller`s credentials broke into the company`s online bank accounts and tunneled their connection through its hacked PC. At the beginning of the robbery, the perpetrators added 11 mules of money to Niles` payroll and sent them automated clearing house (ACH) payments totaling more than $58,000, in which they asked each mule to withdraw its cash remittances and transfer the money to individuals in Ukraine and Russia. A lawyer from the closing company responded as requested with wiring instructions and attached a document with the law firm`s logo and some bank account information presented as the seller`s account number.
The Courtier du Petit sent the thread Thursday morning, the day before the settlement. Fortunately for the Littles, the FBI managed to freeze the resulting $180,000 transfer once it reached TD`s bank account. .