• Cases of check fraud escalate dramatically, with Americans warned not t

    From Thank A Democrat@21:1/5 to All on Sun Nov 5 07:42:08 2023
    XPost: alt.fan.rush-limbaugh, alt.fraud, sac.politics
    XPost: talk.politics.guns

    NEW YORK (AP) — Check fraud is back in a big way, fueled by a rise in
    organized crime that is forcing small businesses and individuals to take additional safety measures or to avoid sending checks through the mail altogether.

    Banks issued roughly 680,000 reports of check fraud to the Financial
    Crimes Enforcement Network, also known as FinCEN, last year. That’s up
    from 350,000 reports in 2021. Meanwhile the U.S. Postal Inspection Service reported roughly 300,000 complaints of mail theft in 2021, more than
    double the prior year’s total.

    Early in the pandemic, government relief checks became an attractive
    target for criminals. The problem has only gotten worse and postal
    authorities and bank officials are warning Americans to avoid mailing
    checks if possible, or at least to use a secure mail drop such as inside
    the post office. Meanwhile, as the cases of fraud increase, victims are
    waiting longer to recover their stolen money.

    Check usage has been in decline for decades as Americans have largely
    switched to paying for their services with credit and debit cards.
    Americans wrote roughly 3.4 billion checks in 2022, down from nearly 19
    billion checks in 1990, according to the Federal Reserve. However, the
    average size of the checks Americans write rose from $673 in 1990 — or
    $1,602 in today’s dollars — to $2,652 last year.

    “Despite the declining use of checks in the United States, criminals have
    been increasingly targeting the U.S. Mail since the COVID-19 pandemic to
    commit check fraud,” FinCEN wrote in an alert sent out in February.

    Checks are still frequently used by small businesses. Eric Fischgrund, who
    runs FischTank PR, a 30-person public relations firm in New York, had
    about 15 checks that were being mailed to him from clients stolen after
    they all went through the same Postal Service distribution center. Ten of
    them were successfully cashed by criminals.

    The checks were stolen in March and Fischgrund became aware of the problem
    in April, when several of his clients who were never late missed payments.
    The Postal Service investigated and Fischgrund has recovered about 70% of
    the revenue, but some of the cases haven’t yet been resolved.

    According to the investigator on the case, the perpetrators used
    technology that melted ink in the “to” field of the checks so they could
    write in fake names. FischTank instructed all its clients to change their
    paper format because it was dealing with a check fraud issue.

    Fischgrund said he’d never previously had an issue with check fraud in the nearly 10 years he has run his own business. Now he has a clause in
    invoices and new client contracts that asks for electronic payments only.

    “I don’t think we’ll ever go back to asking for checks as an option,” he

    Today’s check fraud criminals are not small operations, or lone
    individuals like the Leonardo DiCaprio character in the 2002 movie “Catch
    Me If You Can,” counterfeiting checks from his hotel room and apartment.
    They are sophisticated criminal operations, with participants infiltrating
    post office distribution centers, setting up fake businesses or creating
    fake IDs to deposit the checks. “Walkers,” or people who actually walk in
    to cash these checks, receive training in how to appear even more

    In one case in Southern California last year, nearly sixty people were
    arrested on charges of committing more than $5 million in check fraud
    against 750 people.

    Criminals are getting the checks or identification information by fishing
    mail out of U.S. postal boxes, looking for envelopes that appear to be
    either bill payments or checks being mailed.

    The most common type of check fraud is what’s known as check washing,
    where a criminal steals the check from the mail and proceeds to change the payee’s name on the check and, additionally, the amount of money.

    Some criminals are going further and using the information found on a
    check to gather sensitive personal data on a potential victim. There have
    been reports of criminals creating fake entities out of personal data
    obtained from a check, or even opening new lines of credit or businesses
    with that data as well. This allows fraudsters to create new checks using
    old account data.

    That’s why check fraud experts are saying Americans should avoid sending
    checks in the mail or at least take additional safety steps to avoid
    becoming a victim.

    “If you need to mail a check, do not put a check in your residential
    mailbox and raise the flag to notify the postman. Drop off checks inside a
    post office if you have to,” said Todd Robertson with Argo Data, a
    financial data provider.

    Banks, keenly aware of the problem, are increasingly watching for signs of fraud at branches and through mobile check deposit services, including
    large check deposits. They’re training branch employees to take steps such
    as looking at check numbers, because checks are typically written in
    order, or noticing when a check is being written for a much larger amount
    than the customer’s previous history would indicate. Banks also now deploy software at their branches that can tell how risky a check might be.

    But those systems become moot if criminals are able to persuade tellers —
    often at the front lines for check acceptance — to look past any red

    “These fraudsters are much more aggressive than they were in the past, and
    they are pressuring tellers to override internal systems that might flag a potentially suspicious transaction,” Paul Benda, a senior vice president
    at the American Bankers Association.

    Banks generally reimburse customers if they are victims of check fraud
    within days. However, due to the growing number of fraud cases, refunds
    have slowed down in recent months. In March, a trio of Democratic Senators asked the banking industry to be more prompt in reimbursing victims of
    check fraud whenever possible.

    Another safety tip for businesses is to opt in to a bank’s “positive pay” services with a business checking account. Positive pay means you pre- authorize checks for a certain amount as well as the check number, cutting
    down criminals’ ability to wash the check and withdraw money for an amount
    that isn’t pre-authorized.

    https://ktla.com/news/nationworld/cases-of-check-fraud-escalate- dramatically-with-americans-warned-not-to-mail-checks-if-possible/

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