Fraud Squad tackles counterfeit checks

Check fraud is a growing and costly problem, and area banks are collaborating to fight it.

Representatives from 15 banks met in mid-December to lay the groundwork for a coalition – nicknamed the Fraud Squad – that, in one month’s time, raised $31,400. Thirteen banks each donated $2,000, as did the Springfield Police Department. Springfield area credit unions, as a whole, chipped in $2,400, and two other banks – Bank Midwest and Old Missouri National Bank – both gave $500.

That money has paid for the production of a TV commercial that warns the public of fraud and lets them know how to identify it. The commercial asks questions such as, “Have you received a check for an item you sold on the Internet?” and “Have you been informed that you are the winner of a lottery?”

The warning is followed by a list of participating banks where individuals can find help in determining if a check they’ve received is counterfeit.

KY3 produced the commercial, and the coalition was able to afford two months of air time on five TV channels – KY3, Ozarks CW, KOLR 10, KSFX-TV and KSPR-TV – totaling more than 500 run times.

In addition, each channel has offered to run the commercial as a public service announcement, and there are plans to run the video’s audio track as a radio PSA. Print advertising is not part of the campaign.

A duplicate of the video will be made available to the Missouri Bankers Association, minus the list of participating banks at the end.

“Through them, other markets can contact them to buy a copy, and then they can have their banks listed on it and form their own coalition,” said Empire Bank Vice President Cindy Harding, who handles fraud issues.

When the commercial finishes its run in March, Harding said the coalition may consider other efforts to educate the public, though no plans are set.

Aside from the public campaign, members of the coalition have committed to keeping each other up on new fraud techniques, even if just by e-mail.

“Just because one institution may catch a problem, that person’s going to be out there looking for someone else that they can take advantage of,” said Don Ackerman, president and CEO of TelComm Credit Union, which is participating in the coalition.

Check routes

Local financial institutions are no strangers to check fraud, but they worry that the public is.

Harding says it’s nearly impossible to identify a counterfeit check simply by looking at it. Instead, individuals need to question how they got the check – for instance, by selling an item on eBay or in the classified section of a newspaper.

Popular scams include the secret shopper scheme, where individuals are given a fake check and are told to keep part of it and spend the rest at a store as part of its secret-shopper program. There’s also the overage scheme, when scammers offer to buy an item that costs, say, $5,000, but mail a check for $7,000, according to Josh Nixon, special agent in the FBI’s Springfield office.

“There’s a note with (the check) that says, ‘My accountant made a mistake and cut the check for $7,000 instead of $5,000. Just send me $2,000 back,’” Nixon said.

Then, the individual often deposits the check into an account and, when it’s found to be fake, the individual is out $2,000, and has to pay back any spent money.

“And if they don’t have it,” Empire Bank’s Harding said, “that’s when the banks become the victim.”

Financial institutions also say customer service is taking a hit from check fraud, as account holders are being subjected to more scrutiny than they’re used to.

“People don’t understand that – they get really upset when they get questioned,” TelComm’s Ackerman said. “Many years ago, you’d make new business with a handshake,” Ackerman said. “Nowadays, you have to be very skeptical, unfortunately, of every transaction.”[[In-content Ad]]