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