75.9 F
San Fernando
Tuesday, Sep 26, 2023

Scammers Bilk Businesspeople In Check Scheme

Scammers Bilk Businesspeople In Check Scheme By SHELLY GARCIA Senior Reporter Cary R. Bronstein was doing some routine accounting, reconciling his real estate appraisal and consulting company’s checking account when he noticed something was very wrong he had bounced a check, something he never does. It didn’t take long to discover that someone had duplicated his checks, forged his wife’s signature and written and cashed three checks to the tune of $14,400. “I asked the bank for a list of the checks cleared,” said Bronstein, whose business is in Woodland Hills, “and the first check I found was a sequence 100 numbers higher than the last check I had written. Someone took a copy of one of my checks, took a Xerox copy of my wife’s signature and made a jpg and started cashing checks.” It’s a predicament playing out more and more for individuals as well as those running businesses. The advent of desktop publishing combined with the use of processing centers to process check payments has caused the incidence of check cashing fraud to skyrocket. By 2001, the most recent period for which statistics are available, the number of cases of check fraud increased to 600,000, up 34 percent from 447,000 in 1999, according to the American Bankers Association Deposit Account Fraud Survey Report. The ABA calculated bank losses for that same year at $698 million. Banks are understandably circumspect on the topic officials at Washington Mutual, where Bronstein’s situation occurred, wouldn’t even discuss the kinds of patterns they have seen but others point out that business accounts are often targets of checking account fraud. “People who have commercial accounts write a whole lot more checks,” said John Hall, a spokesman for the ABA, the industry’s trade group in Washington D.C. “Businesses write hundreds of checks a month, so criminals are hoping to slip one in.” Computer assistance Computers have increased the problem exponentially because with them, criminals can duplicate any check, but law enforcement officials say that the even if the check is not a good copy, it is not likely to matter. “You have these lovely cartoon checks? Doesn’t matter,” said Lt. Michael Ranshaw, with the commercial crimes division of the Los Angeles Police Dept. “We’re in an age where you can print your own checks now if you want to, and if that account number is at the bottom, it will come out of your account.” While most of the headlines are reserved for complex cases of identity theft like phishing where social security numbers and other identification is pulled from cyberspace by skilled hackers, but much checking account fraud isn’t very sophisticated at all. Bronstein’s forged checks were typical of the kind of fraud that takes place. Bronstein believes his checks were copied after he made a bill payment the old fashioned way. (The bank has only just begun to investigate his case, so it is too early to know how the theft occurred.) And checking account fraud is often traced to check processing centers with a large workforce and a lot of turnover. But thieves can also get hold of a bank account number simply by stealing a bill payment left in a mailbox awaiting pickup by the postman. “We haven’t found our crooks are all that high tech in their dealings,” Ranshaw said. “They steal your mail. It doesn’t take a genius to scan a picture of your check, and it doesn’t take a genius to buy a program to print your check.” Criminal ways As companies and banks have tried to ease the process of conducting transactions using all methods of payment, there are literally hundreds of ways in which criminals can get hold of a checking account number. “There are 42 billion checks going through the system every year for some banks,” said Hall, “so that’s 1 billion checks a day at some banks.” Hall said banks conduct spot checks and match signatures and the amount of the check, but the effort is necessarily limited. “No, they don’t look at every single check and signature,” he said. “If they did do that your check would take a month to clear.” Similarly, banks could tighten the procedures for paying checks considerably, but were they to do that, they would likely also lose customers. “If they make it too difficult for the criminal, then they make it difficult for the customer,” Ranshaw said. “And the reason the customer is the customer is convenience. If they make you stand inside the bank and show ID and be fingerprinted, these things would stop fraud, but you’d stop going to the bank.” So what’s the owner of a small business to do? The ABA suggests that companies purchase their checks only from well-established printers to keep the check from falling into the wrong hands, and protect their check stock to keep it from falling into the wrong hands. There is also a software program available, Positive Pay, that allows businesses to report to the bank the check numbers it plans to write on any given day in advance. Experts also suggests reconciling checking accounts promptly and paying particular attention to the check sequence. Crooks often believe that if they use a check number that’s already been cleared, they may be caught, so they choose a number well in advance of the number on the check they’ve stolen. And banks will usually make restitution if the forgery is reported early. Finally, check your credit rating annually. But while these common sense rules will help reduce vulnerability, they won’t eliminate the chances of being victimized completely, say all those who work in this area. “It won’t prevent the crime from occurring,” said Ranshaw, “but it will prevent you from being harmed by the crime.”

Featured Articles

Related Articles