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Michigan Credit Union League Home » CU Community » SAS Credit Unions » Marketing » Newsletter Help » Fraud and Scams  

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Account Fraud: How Cautious Are You?
Lori Bahnmueller
Michigan Credit Union League

A reader from Afton, Michigan wrote in after reading a column about bank account fraud. She questioned one of the tips offered for protecting your various accounts. Tip #6 of that article advised against including your driver's license number in any form on your personal checks.

During a recent trip to Florida the reader had encountered a situation where she was asked to write her license number, not on her check but rather on a credit card voucher. Cautiously enough, our smart reader questioned the necessity of this method of verification but was assured it was just a matter of policy.

Fortunately for our reader it was a legitimate request and no fraudulent activity resulted, however many are not so lucky. The Better Business Bureau confirms that it is okay for merchants to ask for any type of identification when conducting a transaction. This form of identification verification is usually done to protect consumers, like our reader, from check or credit card fraud.

While it can be a safeguard to ask for additional identification, you should still not allow a merchant to write those additional identification numbers onto your check or credit card voucher. If a merchant wants to record that information, explain that you don't mind providing the information for verification but you don't want it to be included with your transaction paperwork. If the merchant insists, allow him to write it elsewhere.

By combining your driver's license, social security or credit card numbers with the other information on the check, a thief may have enough details to apply for a loan, credit card or phony bank account in your name. Application fraud, where someone else applies for credit or places an order for checks using your personal information, increased almost ten percent last year, rising to almost thirty million. False applications accounted for over six percent of all MasterCard fraud last year.

Individuals who have experienced account fraud have reported that it can be very difficult to repair the damage. Credit bureaus cannot remove information from your report - even if you prove that it is bogus -- without confirmation from the company that provided it. You must contact each involved company directly.

Here are ten ways to fight against account fraud:
1) Reconcile your account statements each month and immediately notify your financial institution of any suspicious or unauthorized charges.

2) Don't have your Social Security or driver's license number imprinted on your checks. Combined with other information on the check, this could give a thief enough details to apply for a loan, credit card or phony bank account in your name.

3) Notify your credit union if you order checks and don't receive them in a reasonable time period or if you discover checks are missing.

4) Don't leave blank spaces on the payee and amount lines. Write details as close together as possible, avoid abbreviations and draw lines to fill any gaps. Otherwise, it's easy to alter your check. A check payable to IBM, for example, could be changed to read I.B. Mooney.

5) Use dark ink, never light colors or pencil that can easily be erased or covered over.

6) Don't write your credit card number on a check to a merchant, even if the merchant asks for the information.

7) Don't make a check payable to "cash." If lost or stolen, it can be cashed by anyone.

8) Never endorse a check until you're ready to cash or deposit it. Preferably, deposited checks should be endorsed "for deposit only" and your account number should be included. That way, if the check is stolen, it can't be cashed.

9) Don't just throw out canceled checks, unused deposit slips, old bank statements or credit card and ATM receipts. Shred and destroy them as best you can. These items could be used by a thief to make new checks or to order them from a check printer.

10) Never give out checking account information over the telephone unless you agree to pay for something. If a telemarketer says a checking account number is needed, suspect fraud.

If you suspect that you have been the victim of fraud or have been approached by someone attempting to deceive you, report it to your financial institution immediately. You can also report a fraud to your state's Attorney General's Office, consumer protection division.

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