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

Additional Newsletter Topics

Lori Bahnmueller
Michigan Credit Union League - Your Money Matters

Checking account fraud, stemming from stolen, lost or counterfeit checks cost financial institutions some $10 billion a year, much of which is passed along to consumers in higher prices for goods and services, according the Credit Union National Association (CUNA).

Battling account fraud is everybody's business. In fact, recently thousands of people, including many in Michigan have had money withdrawn from their checking accounts without their authorization. The Michigan Attorney General's Office has received numerous complaints against magazine firms and the Federal Trade Commission in Washington, D.C. issued warnings about scams and filed lawsuits against two magazine telemarketing ploys.

Are you liable for losses if a thief writes a check on your account? Usually not, but the law is uncertain in this area. Bank customers and credit union members are responsible for paying reasonable attention to their accounts and protecting them against misuse. In any case, it can take a long time and considerable trouble to clear up a problem involving your account.

The good news is there are ways to protect yourself. For example, in cases where check fraud is the cause, check printers are adding new security features to their checks to discourage altering or counterfeiting of checks. Major check printers offer specially printed checks that are difficult to photocopy, computer scan or chemically alter. But security features alone won't deter or prevent all check fraud.

Here are 10 additional ways to fight against account fraud:
1) Reconcile your account statements each month and immediately notify your financial institution of any suspicious or unauthorized checks or withdrawals.
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 phoney bank account in your name.
3) Notify your bank or credit union if you order checks and don't receive them in a reasonable time period, or if 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 doctor 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 and suspect fraud if a telemarketer says a checking account number is needed.

If you suspect that you have been the victim of fraudulent activities or have been approached by someone attempting to deceive you, report it to your financial institution immediately. To report a fraud you can call the Michigan Attorney General's Office, consumer protection division at (517)373-1140, 8 a.m. to noon and 1 p.m. to 5 p.m. weekdays. An automated service is available at other times.

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