Court Rules Against Title Company in Cyber Crime Case

December 31, 2013

The U.S. District Court for the Western District of Missouri last month rejected a suit brought by a title company seeking to recoup money stolen as during a fraudulent wire transfer.

Missouri-based Choice Escrow sued Mississippi-based BancorpSouth Inc. after hackers stole the title company’s online banking ID and password and made an unauthorized wire transfer of $440,000 to a corporate bank account in Cyprus.

Choice Escrow opened an escrow/trust account with BancorpSouth in 2009. The bank, at the time, required customers to utilize Dual Control, which mandated that two individuals use separate user IDs and passwords to complete an electronic wire transfer. According to court documents, the title company twice declined this safety measure, citing a preference for convenience and that the employee who handled wire transfers was in the office by herself.

While Choice Escrow alleged that BancorpSouth’s security procedures were not commercially reasonable, the court based its March 18 decision on the fact that Choice Escrow declined the bank’s recommendation to use Dual Control.

The court noted that Choice Escrow also declined to set a limit on the amount or number of wire transfers allowed each day, and that the transfer amount initiated by the criminals was not unusual for the title company.

Agents and Abstracters Forum

To learn about information security and what to look for when shopping for solutions, don’t miss ALTA’s next Agents and Abstracters Forum, scheduled May 13 in Pittsburgh. Andy Maloney of Nashville Title Insurance Company will talk about the importance of protecting non-public personal information (NPI) and IT security. Click here for more information and to register.

The third pillar of ALTA’s “Title Insurance and Settlement Company Best Practices” addresses protection of NPI. Click here to access ALTA’s resources on Best Practices.

Additional Information


Contact ALTA at 202-296-3671 or communications@alta.org.

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