| Payroll check fraud came calling four days before | | | | need all that information. So what do we do in the |
| Christmas. A branch of our main bank called and | | | | future to prevent this? Positive Pay. |
| wanted to verify a check. The young lady who took | | | | Positive Pay is where we now report every issued |
| the call in our office quickly realized that the check | | | | check to the bank. They keep a list of the check |
| was out of sequence and for a person not on the | | | | number, date issued, amount and Payee. Also whether |
| client's payroll. The check was cut on our trust | | | | that check has ever been presented before. Any |
| account. I spoke to the bank employee who had called | | | | check being cashed at a branch is verified against that |
| us. They were stalling the person by having then fill out | | | | list before being allowed to clear. Every check being |
| an account application, more about that later. I took the | | | | presented to the bank is verified against that list |
| location of the bank and called the local police | | | | before being accepted for clearing. This should stop |
| department. Of course I didn't have the right exact city | | | | checks like this from being cleared in the future. It will |
| and had to make an additional call. The police finally | | | | not stop scammers from creating them. There is easy |
| were dispatched to the grocery store where the | | | | availability of check stock and MICR ink and printers. |
| branch bank was. The woman trying to cash the | | | | This may seem like a slam duck to scammers but we |
| check was gone. But the police were fairly sure that | | | | are not worrying as much now with Positive Pay in |
| they would apprehend her soon. Next day she tried to | | | | place. |
| pass a check on someone else at a different bank. | | | | How do you stop this completely? 100% Paperless |
| The police were called and she was arrested and | | | | Payroll! If you are not issuing checks there is nothing |
| turned over on a filed warrant to the police I had called. | | | | for a scammer to create or cash. I have not seen |
| They had issued a warrant the same day she cashed | | | | where a scammer has been able to get into the |
| a check on us and had given the bank as part of the | | | | Federal Reserve and NACHA to be able to create |
| paperwork a copy of her real drivers license. No one | | | | fraudulent ACH deposits to their accounts. Even then |
| ever claimed crooks were smart. | | | | they would be a lot easier to trace and track down. |
| She had cashed eight checks on our account for | | | | The scammer would have to be bank customer and |
| about eight thousand dollars total. Checks under a | | | | have been verified by the bank when they set up an |
| thousand dollars are easier to cash. | | | | account. For employees without bank accounts Payroll |
| We have a very sophisticated check with all kinds of | | | | Debit Cards work just fine. |
| safeguards against fraud. Special paper, void | | | | We of course have every intention of assisting the |
| pantographs, MICR lock, warning legends, artificial | | | | local DA in the prosecution of this person and her |
| watermarks, colored paper and more. So what | | | | cohorts in crime. |
| happened. The scammer and her cohorts simply | | | | Charles J. Read, CPA has been in the payroll, |
| copied the information including the MICR information | | | | accounting and tax business for 30 years, the last |
| on to new check stock. They actually didn't need a | | | | fifteen in private practice. |
| real check; they could have used a copy. They | | | | Mr. Read is the author of "How to Start a New |
| however changed the identifying information for the | | | | Business." |
| particular employee the original check was issued to. | | | | To find professional payroll service at a budget price |
| We currently have not been able to identify that | | | | go to a paperless payroll company. |
| person but we probably will in the end. The scam artist | | | | For a full service payroll bureau with CPA's on staff |
| would not have changed the information if they were | | | | visit . |
| not interested in protecting the person whose check it | | | | See an excerpt of Mr. Read's interviews from William |
| was originally. There was no way to make the | | | | Shatners "Heartbeat of America" television show on |
| information on the check not available to the scammer. | | | | the web sites linked above. |
| The employee, the employee's bank and our bank | | | | |