Home | Locations & Hours

Statement of Condition

Banking Hours

Security Information Center

Technology Topic of the Month

Checking Account Fraud

Victim Response Tips
Summary of Check 21- the new federal law about checking accounts
Reduce Your Risk
Resources

Checking account fraud can be the most difficult type of financial identity theft to resolve. Identity theft is limited to a thief's creativity, brazenness and skill. Unfortunately identity theft related to checking accounts is a nightmare that truly keeps on taking. If you are a victim, resolution is not an easy process, but one that you will reach by staying on top of things, keeping highly organized and following the advice below. There are many forms of check fraud:

Check theft- when the thief uses existing checks stolen from you
Check Washing- when a thief takes an existing check and chemically washes the name of the recipeint and amoutn from the check, altering it.
Checking account takeover- when a thief adds his/her information to your account, changes the mailing address, or makes other alterations to your account for unlimited access.
Check counterfeiting- when a thief takes blank check stock and creates additional checks that mirror your true account. Your checking account routing information appears on every check and deposit slip you have. It doesn't mater if the account is open, closed, or has enough funds in it.
Check synthesizing- your name and address appears on a check for an account that you never opened, perhaps at a bank you don't use, and in faact, might never have been a real account at all.

NOTE: Each type of check fraud requires a slightly different response from you and has different pitfalls.

Due to the complexities and variations of these five categories, check fraud is probably the most misunderstood type of identity theft crime. It is truly a cime of the computer generation. Anyone with a PC and a printer can create a check. Unfortunately, unlike credit cards, there are no universal programs-to date - that merchants can subscribe to in order to vrify if it authentic and belongs to the person who is cashing it.

One of the great misconceptions that consumers have is about scanners. Many people believe that the scanners were used in stores connect to a universal system. That is not true. They only tell the clerk if you owe money to that particular store or to the group of stores using the same system.

The lack of a universal check clearance system is the loophole check fraud artists take advantage of when committing this crime. Merchants don't know if the check has been stolen, is part of an account you closed years ago, has been counterfeited or synthesized. Essentially, they are as much a victim of this crime as you are. And if they are a small business, that loss may be very significant.

As in most "jobs", the thieves get better at this crime the longer they work at it. Checking account fraud can go on for years, until the criminal tires of the game or is caught.

Victim Response Tips:

There tips are for everyone, no matter what type of case it is.

Organization of your case is important
With any check fraud, you should report the crime to the police as soon as it is discovered and get a copy of that report. You will need to send a photocopy of the report, along with a letter or fraud affidavit, to any merchant, collection agency or financial institution where a bad check has been passed.
All requests should be made in writing and in a timely manner. All corresponsence should be sent "certified mail, return receipt requested."
Whenever possible, speak with the fraud investigation department and not customer service or bank managers.
Close any compromised financial account. When working with the fraud department, ask that a password be placed on the account, especially if the financial institution refuses to close it. This will also help to verify or authenticate you as the holder of the account.
Warrants- It is possible that a criminal warrant will be issued, by the local prosecuting atttorney, for a bad check (if written for more than several hundred dollars). Once you make contact with the merchant or financial institution, ask is they have referred this to the police, the state's attorney, or the district attorney's office. If so, request that the merchant or financial institution contact that agency and request they withdraw that warrant. Find out what documents they need in order to clear the warrant. Make sure you receive a letter stating that the warrant has been withdrawn/cleared, and that your name is not in the warrant system. Your name needs to be cleared from the local level database, state level database and national level database (if placed there). You can call the "Court Clerk" in the county where the check was passed to find out if a warrant exists in your name.
Contaact all the check verifications companies listed below. If a check is denied, ask the merchant which Check Verification company they use so you know where to start. You have the right to have erroneous or fraudulent information removed from the report, upon written request and with proof (i.e. a plice report or a collaborating letter from a bank, per FCRA).
A federal program, called CHECK 21, has significantly restructured the banking industry.
Checks are now electronically recorded then shredded.
Check 21 creates a paper copy of an electronic image of a check. There are 3 types of checks available to the account holder. It is important to realize that each type of check carries with it different protections.
Image Statement, which is copies of your checks each month on a single page, is not suitable for legal dispute puposes.
A smiple copy of the check which does not beear evidence of processing, is not suitable for legal dispute puposes.
A substitute check is a photocopy of the electronic image of the check and is considered a legal equivalent to the original check. This copy is required if you want the right to dispute any issue involving that transaction.
IT IS CRITICAL that you carefully review each bank statement when you receive it to monitor for check fraud. Most financial institutions will only accept fraud claims 30-60 days after a statement has been mailed (stated in the notices on the back of each biling statement). Any discrepencies you find should be immediately reported. Discovery of issues beyond the deadline, make it nearly impossible to correct any problems.

Check theft:

Notify your bank both orally and in writing. Immediatly close this checking account and any connecting financial accounts. request a Stop Payment be placed on the stolen check numbers.
Request for a "re-credit" or refund of the lost funds.
Request your bank flag the check/s as stolen. Your bank should notify the receiving bank to hold the check intact for law enforcement purposes. In other words, ask them to flag it so they can make sure any accepting bank holds onto the check rather than destroying it as they are allowed to do under Check 21.
Get a copy of the check for your file- requesting a substitute check if you cannot get the original.
Make sure you get a letter of clearance or confirmation from your bank that the account has been closed and is marked "closed due to theft and not to be reopened".
Save this letter and send a photocopy of that letter and the police report to any merchant who has accepted a check from the closed account.
Request letters from each merchant once they have declared that you are not responsible for the charges. keep these in a locked area for at least 10 years.
Open a new account, adding a strong password so that no alterations can be made to this account, such as a change of address, adding additional users, etc. without your permission.
Request that your bank notify all check verfication companies. Most check verification companies will not take information from consumers.

Check Washing

Your immediate problem is the one check which has been altered. notify your bank and have the fraud unit investigate the situation . If the check has not yet ben destroyed, then they may be able to find the prooof of alteration.
Your second problem is that the thief now has your bank account number. Immediately close the account and follow the directions for Check Theft.

Checking Account Takeover:

Warning signs are:

You don't receive your bank statement
You receive a notice from the bank about a unknown change
Checks have signatures which are not yours
Withdrawls, bank transfers or deposits you cannot account for
Merchant notification about a bounced check you did not write
Having a check declined by a merchant, and you have not bounced any checks
A letter from a check verification company or a district attorney about a problem
Should you discover you are a victim of acount takeover, immediatley notify your bank, close the account. Ask questions of the bank (fraud division) to determine how, when and where these modifications were made. Other questions to ask-did they ask for a pssword or your Social Security Number?
If you believe the perpetrator was someone inside the bank, chang banks.
Follow the directions for Check Theft

Check Counterfeiting:

Warning signs are:

Your statment contains checks you never wrote. It could be a check that follows the number series you use or starts a new number series. These checks could also be check numbers you already used.
You receive a notice from the bank about a fraud issue.
Checks have signatures which are not yours
Withdrawls, bank transfers or deposits you cannot account for
Merchant notification about a bounced check you did not write
Having a check declined by a merchant, and you have not bounced any checks
A letter from a check verification company or a collection agency
A letter from a district attorney about a problem
Notification about a warrant for passing bad checks
If these checks are written against your account, close the account. Open a new one and follow the directions for Check Theft

Check synthesizing:

Warning signs are:

You receive an inquriy from a bank you don't use
You receive an IRS income statement from a bank that you don't use
Merchant notification about any checks you did not write
Having a check declined by a merchant
A letter from a check verification company or a collection agency
A letter from a district attorney about a problem
Notification about a warrant for bad checks
You can't close an account that doesn't exist. You con't notify every bank in the country. However, request that your bank notify the check verification companies about this problem.
Request that any fake checks be held intact and provided to law enforcement.
Again, write each merchant and explain the situation, including the fact that there have been x number of checks written so far and that all have been reported to the police.
Remember to update law enforcement as new checks are discovered and obtained.