The recent cases of two Texan women who had their personal information and checking account numbers stolen and used to validate bogus checks, have brought into the spotlight a questionable check processing methodology used by some retailers and banks. According to CBS11TV, the method practically allows identity thieves to shot down any possibility of investigation because of a lack of actual evidence, and makes the retailers and the financial institutions unwitting accomplices in the crime.
Linda Jacobs and Angie Carden are the aforementioned identity theft victims whose names found their way on hot checks used by the criminals to buy things at Kroger and Wal-Mart stores. Finding out that they were suspected of fraud was shocking, but luckily for them they managed to prove that they had nothing to do with it (Carden was even in the hospital at the time when the checks were written).
Even though instances of successful check forgery are getting rarer as the years pass, there are always loopholes in the checking process that can be taken advantage of. In these two cases, the flaw in the system consists of retailers treating checks as electronic debits. When a customers hands one over to the cashier, the check is given back to the customer after the information has been copied, and sometimes the retailers don’t even perform a visual scan.
This means that the original forged check is given back to the criminal, and thus any possibility of dusting it for fingerprints and using it as evidence against the delinquents is gone. Angie Carden’s daughter blames Wal-Mart and its electronic check system for the fraud, but the company’s spokeswoman says that the system has helped them reduce the number of fraudulent checks in recent years by having a third-party verification system validate the check.
After the charges against the women were dropped Carden was reimbursed by the bank, since fraud victims of the electronic check debits are entitled to get their money back from the bank within 60 days. Jacobs didn’t lose any money in the first place, but lost a lot of time and experienced a lot of frustration while trying to clear her name.
After this, Texas changed its law concerning check verification and made it mandatory for financial institutions to contact check verification companies when their customers fall victim to identity theft and have their accounts closed.