Cactus Village Community

Preventing Check Fraud

Jul 27, 2003

I attended a seminar a few months ago. The seminar was sponsored by Wells Fargo Bank. The topic was preventing check fraud. The bank representative stated that the bank typically handles approximately $1 million of fraudulent checks each month. The number of ways check fraud occurs is significant. The following stories illustrate.

One Saturday a man sat down and wrote checks to pay his bills. After preparing the checks for mailing, he dropped them in the outdoor mailbox at the post office at Northern and 1-17. It was about 11 p.m. on Saturday evening. On Monday afternoon his wife received a call from a check cashing store. The caller stated that a check had been presented to be cashed which was drawn on the personal account of the man and his wife. The wife opened the check register and determined that the check had been written the prior Saturday to Discover Card. It was one of the checks which had been mailed on Saturday night. By Monday afternoon it had been stolen from the mailbox, chemically washed, made out to a different payee with a forged signature, and presented for payment at the check cashing store. Happily the wife was home when the check cashing store called to verify that the check was good. The police were called.

The man and his wife suffered no monetary losses. They did, however, have to close their account and open a new one, since their account information (name, address, telephone number, bank, and account number) were now in the hands of someone who intended to use that information to their detriment.

An employer pays his employees on Friday afternoon. One of the employees does not have a bank account. I?’he employee takes his check to a check cashing store. As he is waiting in line to cash his check (for $456), he is approached by a man who offers to purchase the check for $500 cash. The employee is in a hurry anyway. He takes 5 $100 bills from the man, gives him the check, and goes home. From Friday until Monday morning, the man who purchased the check is very busy. He now knows the name of the company, its address and telephone number, its bank and bank account number. Using commercially available products, he prints 50 paychecks drawn on the company?’s bank, each for under $500. He travels from one check cashing store to another, cashing the 50 paychecks. On Monday afternoon, he packs his computer and moves to a new city.

Moral: Don?’t give checks to people you don?’t know, or to businesses that are not well-established in the community. Don?’t sell your paycheck to anyone call the police instead. Don?’t mail your bills late at night or on the weekend. Don?’t let the information that is on your persona! check fall into the hands of anyone you don?’t know and trust. . . ☻