Be Aware of Check Fraud

I’m writing something a little different this week, but I think it’s worth discussing.

At the outset of establishing this blog, we said we wanted this to be a place for us to communicate with our customers as well as Tucson in general. We said we wanted to discuss our business honestly (Metro Car Wash), as well as our customers, our community, and the interesting stories that might come from a group of individuals that love to wash cars under the desert sun.

Unfortunately, not all those stories are good ones. This is one of the bad ones.

This past week, Metro Car Wash had the very unpleasant experience of being a victim of Check Fraud (we got robbed of over $4,000). Ugly as it was, I thought it might be good to share our story. Once you understand what these crooks are doing, you might be shocked to find out just how vulnerable all of us (businesses and individuals) actually are to this form of theft.

Our story started off when we got a call from our local bank letting us know that our Petty Cash Account was overdrawn. This was quite a surprise. In addition to being a good car wash, we’re pretty good at keeping our books clean too. You can imagine my shock, then, when I went on-line and saw a negative balance of $3,000 (I’ll let you imagine the words that were spoken/shouted while my heart rate exploded and I pounded my fists on the table).

After my eyes rolled back into focus and my breath became manageable again, I noticed that there were four checks debited from my account that I didn’t remember writing. I clicked “view” and discovered why I didn’t remember writing them: I didn’t.

The checks weren’t Metro’s actual checks. They were generic business checks with the name Metro Car Wash on the top, but the wrong address underneath. The banking information on the bottom of the checks (the routing and account numbers) were also ours, but the names of the individuals the checks were written to were no one we knew. Furthermore, the check was signed by Pete Carroll (yup, the same name as the current coach of the Seattle Seahawks … I doubted it was the actual guy); in other words: not an authorized signer. I looked on the back of the check copies; all of the checks had been cashed at approximately the same time.

Since then, I’ve spent my time closing bank accounts, reconciling accounts, filing police reports, and generally walking around in a lousy mood. Oh, and I’ve learned how easy it is for someone to do this.

Here’s the skinny:

All someone needs to rob you is a copy of your check, a computer, and a printer.

Do you write payroll checks? Do you write checks to vendors? The pizza delivery guy?

Then your account number and routing number are out there.

All someone has to do is write these numbers down and take them home. Then, in front of their computer, they can actually download Check Writing Software for free. They place business checks they purchased at an office supply store into their printer, they input their name and the dollar amount they believe they deserve (typically a reasonable paycheck amount so as to not draw attention), and press: PRINT.

The check is made out to them, so they don’t have a problem cashing it; they show their real ID, collect their money (your money) and take their sweetie out for a nice dinner courtesy of you (they at least hopefully toast you for your generosity).

It’s as simple as that. I wish I was kidding.

And here’s the really disturbing thing: my bank didn’t even bother to press charges. They actually told me not waste my time either (I didn’t listen to their advice). They said this happens all the time. It is what it is in the banking world I guess.

So, OK … what do you do now? How do you protect yourself?

The truth is, depending on your bank, you may not be able to. Larger banks, like Chase, have some interesting on-line Fraud Protection Tools they’ve just rolled out, but smaller banks still rely on the chance of noticing when signatures don’t match (you can see how well that worked for us).

My bank told me: you should review your accounts every day.

The detective I’m working with gave me this advice: Don’t write checks. He was serious.

We’re now looking at switching our payroll to debit cards (rather than cutting checks).

I guess I don’t have a happy ending to this story, but I do hope it helps some of you avoid what happened to us. It’s a scary world out there and I’d like to think we can use tools like this blog to help each other out.

Until next time, stay clean my friends (and keep an eye on your check balance). Oh, and if you see a suspicious looking thug toasting a glass of Champagne and thanking Metro for his bonus, please let us know!

-DJ DripDry