Audrey, a Pennsylvania notary received a telephone call from a loan broker she knew who asked her to notarize loan documents for a couple who wanted to refinance their loan.
She agreed and met the broker and couple for lunch. Audrey asked for identification from the couple who provided drivers’ licenses. She notarized the documents and recorded the transaction in her register.
Several months later, the police contacted Audrey and asked to see her register. They were investigating a case of identity theft. The loan broker and couple she had helped had deceived her. The couple didn’t own the property they had refinanced. The three criminals took the loan money and ran.
In the meantime, the rightful property owners had spent a considerable amount of money and time getting their property rights restored. They sued Audrey alleging negligence in the notarization process, even though she had done nothing wrong. The bank that had made the now uncollectible loan also filed suit against Audrey.
Although she was bonded, as required by the Pennsylvania Notary Public Law, Audrey did not have Errors and Omissions Insurance. A notary bond protects customers in case a notary makes a mistake. This money must be paid back to the bonding company. Errors and Omissions Insurance insures the notary when a customer suffers a financial loss in different kind of insurances, that include from home insurances to car or motor insurance as the i4mt. It provides financial protection for the notary and does not have to be paid back.
Audrey had to retain an attorney to defend herself against the lawsuits. She ended up paying thousands of dollars in attorney fees and settling the lawsuits, despite her innocence. It was financially devastating to her.
Although Audrey and this particular situation is a ficticious one, there is always the possiblity of a notary being accused of misconduct and facing a lawsuit.
The Pennsylvania Association of Notaries (PAN) offers three levels of Errors and Omissions Insurance: $30,000, $50,000 and $100,000. For more information on Errors and Omissions Insurance, call PAN at 800-944-8790 Monday-Friday 9 a.m. to 4:30 p.m. or visit our Web site at www.notary.org.