Tuesday, June 12, 2007

Can Check Fraud Become Obsolete?

I am still amazed as I stand in any line at a store and the person in front of me pulls out a checkbook and writes a check, has to dig out a shopper ID card or some other form of ID, then hands it to the cashier. The cashier, with a puzzled look, takes all the documents and writes down information on the check. The cashier hands any ID back to the patron then sticks the paper check into the register 3 different ways.

At about the midway point through this production, I realize why I don’t write checks anymore and the person who invented the debit card should win the Nobel prize. What an incredibly antiquated and outdated system that is still being used by millions of people despite all the pitfalls.

Beyond the fiasco at the register, look at what else this dinosaur system burdens us with:

The number of checks stolen or forged each year is about 500 million checks and over $10 billion in lost revenue. Check fraud in itself is expected to grow at a rate of about 2.5% each year.

The average number of fraudulent checks written daily is about 1.4 million equaling $27.3 million worth of fraudulent checks written everyday.

According to the National Check Fraud Center, check fraud and counterfeiting are the largest and fastest growing problem that the United States financial system now faces. The estimated losses produced annually are over $10 billion and is expected to continue to rise.

Sure checks have their place in very few instances but these statistics coupled with the surge in identity theft, makes me wonder why the banks and other businesses still embrace them.

Why does the public still embrace them as well? The alternative for many will result in anxiety and fear. Debit cards with PIN numbers, all the talk about loosing information in data breaches, plus identity thieves looking over my shoulder at the checkout, all give the feeling of fear.

Reality paints a different picture, because these are the same people who write checks in regular ink, place them in the mailbox in the morning before work, put that red flag up, and never give a thought that they could be contributing to the above statistics by the end of the day.

What can you pro-actively do to help make check fraud obsolete?

1)Switch to an online billpay system
2)Use a debit or credit card for all merchant transactions
3)Have companies that you pay monthly like a utility debit your checking account

But …..if you must still use checks:

1)Don’t put them in your mailbox in the morning and raise that red flag
2)Lock up all checks and deposit slips in your home
3)Don’t carry a checkbook around in a purse or leave it in your car
4)Use a black ink Bic Rollerball or a gel pen to write out any checks, they can’t be washed off

If your are a victim of identity theft and check fraud is one of the causes:

Report stolen checks, and close unauthorized checking and savings accounts.
If you have had checks stolen or bank accounts set up fraudulently, report it to your bank or to one of the check verification companies listed below. (If a merchant rejects your check, ask for the name of the check verification company.)
When you do contact any major check verification companies listed below, request that they notify retailers using their databases not to accept your lost or stolen checks. Place immediate stop payments on any outstanding checks that you have not written.

• CrossCheck: 1-707-586-0551
• International Check Services: 1-800-526-5380
• National Check Fraud Service: 1-843-571-2143
• SCAN: 1-800-262-7771
• Equifax Check Systems: 1-800-437-5120
• TeleCheck: 1-800-710-9898 or 1-800-927-0188
• Chexsystems: 1-800-428-9623