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Check Fraud: Use a Shredder — and Hope Everyone Else Does, Too!

Written by Nickel - 4 Comments

Check Fraud: Use a Shredder

I’ve suggested in the past that you should think twice before writing a check to a complete stranger. After all, your checks contain both your account number and your banks routing number — exactly what someone would need to help themselves to your money.

This is especially troubling given the ease with which checks can be printed, as well as the fact that bank accounts don’t typically have the same level of fraud protection as credit cards do.

Well, guess what? Now that more banks are accepting remote deposits using photos of checks, you have reason to worry even if the recipient isn’t a crook. Think about it… They receive the check, shoot a photo for the deposit, and then what? Rip it up and throw it in the trash?

As evidenced by a recent story out of California, tearing checks up — or even shredding them — isn’t particularly effective when it comes to preventing fraud. According to detectives in Santa Clarita, a couple managed to steal a total of $16k from 20 victims by dumpster diving at a local self-storage facility.

The couple apparently managed to piece together hundreds of “partially shredded” checks. Once they had the account and routing numbers from these checks, they were able to print and use counterfeit checks that were drawn on the victims accounts. Yikes!

I’m not sure about you, but I run everything like this through a cross-cut shredder that produces tiny particles, pretty much ensuring that nobody will be able to piece things back together. But what about the people that you write checks to? How sure are you that they’re doing something similar vs. just ripping them up (or using a strip shredder)?

As if you needed more things to worry about…

Source: CBS Los Angeles via The Consumerist

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Published on May 14th, 2012
Modified on May 16th, 2012 - 4 Comments
Filed under: Banking, Identity Theft

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

4 Responses to “Check Fraud: Use a Shredder — and Hope Everyone Else Does, Too!”

1
Financial Advice for Young Professionals Says:
May 14th, 2012 at 4:22 pm
I’ve actually wondered about this. What kind of protection do banks give you if someone got a hold of your checkbook for ex. and wrote themselves a check for a $1,000 and cashed it before I noticed?
2
BG Says:
May 15th, 2012 at 8:21 am
Too risky. The investigators would have physical evidence (the check) plus in the perpetrators own handwriting. CC fraud seems more likely, doesn’t leave behind a physical check nor a handwriting sample (aside from a scribble for a signature).

Anyhow, I suspect the retailer would eat the cost of the fraud — I doubt banks ever take a loss on fraud.
3
Kevin R. Says:
May 15th, 2012 at 10:53 am
I agree with BG, as fraud goes, this is one of the easier to track down (even if wired out of your account, it goes to an other account, with a very clear trace available). Not to say this is not prevalent, just not sophisticated.

Per the first comment, here’s an OCC’s page on check fraud which gives:

“You are responsible for reviewing your periodic statement. Generally, if there were multiple problem transactions from the same person, you have 30 days from the statement date to find the error and inform the bank. However, if there is one problem transaction, you generally have up to one year after the statement date to notify the bank. (Please note: the time period for this prompt notification may vary by bank and State.)“
4
Kurt @ Money Counselor Says:
May 16th, 2012 at 10:31 am
I wonder how desperate someone must be to go through what has to be the incredibly tedious process of piecing together shredded checks. yikes!

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