When new homeowners close on a house, there is a need for the home’s title to switch to their names. Title agencies, such as ABL Title Insurance Agency, tend to have professional liability insurance policies to protect them in the event something is amiss. In this case, ABL had a policy with Maxum Indemnity Company.
In June 2015, ABL acted as the closing agent for the sale of a residential property in New Jersey. However, instead of directly communicating with persons on the transaction, an ABL employee was approached by a scammer.
The scammer sent an email acting as the seller of the house’s attorney, requesting payment be wired instead of paid by check. The employee followed through, sending $579,360 to the scammer and subjecting ABL to a cyber nightmare.
The money itself came from an escrow account in which ABL held money for its clients’ closing transactions. By wiring the money to the scammer, ABL was prevented from issuing checks related to other matters and was left with insufficient funds to cover checks already issued.
Claims came rolling in from parties whose payments would not go through or whose checks had bounced.