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  • 1.  Beware Fake Check Scams

    Posted 08-22-2023 08:36
    Edited by Wayne Schulz 08-22-2023 08:36

    Our company recently was hit with a fake check scam. From what we can tell one of our outgoing checks to a vendor was stolen in the mail. It's not like the 1980s where a thief is using whiteout or washing the check to apply a new name. Today they create all new checks using stolen bank account and routing numbers. These checks usually are 100% legitimate looking since there is any number of software packages that print checks on blank stock.

    And what makes this scam so easy to start is in some cases the scammer doesn't need to steal a check since all paper checks have bank account and routing numbers printed for everyone to see.

    in short this is how most of these scams work now

    1. Scammer obtains bank account/routing information of known good account
    2. In our case they also used the same check no, amount and date - likely to avoid the basic positive pay ( which may only check no, amt, date ). Using the same check number and amount also made it difficult for us to catch without looking at the payee on the check and noticing that it was someone we did not know or ever write a check to.
    3. The scammer creates an authentic looking check using all of your company information
    4. The scammer then goes on the web using any number of scams in order to find their ultimate "mark". Frequently these are work from home scams where they promise someone $35/hour for doing data entry.
    5. Here's the scam - once they find the person in step 3 above they will send that person a check ( using your stolen account info) and tell that person to deposit the check
    6. The person deposits the check
    7. Then the scammer asks the person to pay them back for what may be an overpayment that was made. in some cases the person is asked to "buy supplies" from a fake website.
    8. Ultimately the result is the person who deposited the check is surprised to find that it "bounces" in a week, month or two months once the fraud is uncovered

    The FTC has a better explanation of some of the ways that this scam works - How To Spot, Avoid, and Report Fake Check Scams

    I believe this is probably the beginning of the end for paper checks. We've stopped issuing them and ony pay by credit card or ACH. 



    ------------------------------
    Wayne Schulz
    wayne@s-consult.com
    Schulz Consulting
    (860) 516-8990
    Moodus, CT
    ------------------------------



  • 2.  RE: Beware Fake Check Scams

    Posted 08-22-2023 09:23

    I had a client experience the same scan about 2 years ago.   The bank suggested and we put in positive pay service, which of course added more fees for the bank by requiring a higher level service...



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    Gary Feldman
    Principal
    I-Business Network
    Marietta GA
    16786270646
    http://www-i-bn.net
    ------------------------------



  • 3.  RE: Beware Fake Check Scams

    Posted 08-22-2023 09:43

    They suggested we close our account which is "quaint" advice that may have been practical in 1982 when nobody used direct ACH to receive payments. It would be very difficult to quickly close an account and contact every customer who is sending a direct ACH with a new account number. Bank of America claims they can turn an account so that it only receives money - no payments out. However that only partly solves the issue as now you have to update all your outgoing automatic payments to a new account number.

    I suspect at some point we will see some federal regulations around this and perhaps all electronic banking will have to include some type of positive pay where you can review transactions and instantly report fraud online. Probably accompanied by a new set of fees....

    It took Bank of America a week to send me a set of paperwork that is all manual and looks like something from the 1980s.



    ------------------------------
    Wayne Schulz
    wayne@s-consult.com
    Schulz Consulting
    (860) 516-8990
    Moodus, CT
    ------------------------------

    Original Message


  • 4.  RE: Beware Fake Check Scams

    Posted 08-22-2023 10:53

    Instead of closing the account, set up positive pay and be sure the bank uses payee verification.  Even though Sage uses the vendor name in the file, some banks, surprisingly don't verify the payee name unless you ask them to enable that feature.



    ------------------------------
    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Chauffeur, Chef, and Personal Assistant to Sprinkles
    ------------------------------

    Original Message


  • 5.  RE: Beware Fake Check Scams

    Posted 08-23-2023 00:25

    Happened to me once.  Thief stole a check from vendor curbside mailbox.  Paid mortgage, car payment, credit card, etc, all by simply providing routing/acct#.  I traced the thief to his/her house in the neighborhood and reported it to local police. They yawned.

    Bank refunded all. 



    ------------------------------
    Bob Pfahnl
    Manager - Silicon Valley
    DSD Business Systems
    ------------------------------

    Original Message


  • 6.  RE: Beware Fake Check Scams

    Posted 08-26-2023 06:13
    We went through this back in November. The scary part was they were presenting checks in 6 digit figures. We already had ACH positive pay on but since we don’t cut a lot of checks, I didn’t have positive pay on. Thankfully our bank noticed that the starting check number was wrong and called me right away. We did turn positive pay on and then immediately opened a new account. However, it took us almost 6 months to move every over - mainly because our vendors couldn’t get their stuff updated.

    I would say it is worth considering closing in a gradual flow. The fraud attempts on our account got so bad I was rejecting checks once or twice a day. Just got to the point where it wasn’t worth the stress of worrying about it.

    Sent from my iPhone




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