ITRC Solution 12 – Check Fraud

These are general steps to be taken, no matter what type of check fraud it is (see ITRC Fact Sheet 126 for types of check fraud).

• With any check fraud, you should report the crime to the police as soon as it is discovered and get a copy of that report. You will need to send a photocopy of the report, along with a letter or fraud affidavit, to any merchant, collection agency or financial institution where a bad check has been passed. See ITRC Letter Form 126 - Initial Victim of Identity Theft Statement and Fraudulent Checking Account Information Request
• All requests should be made in writing and in a timely manner.  All correspondence should be sent “certified mail, return receipt requested.”
• Whenever possible, speak with the fraud investigation department and not customer service or bank managers.
• Close any compromised financial account. When working with the fraud department, ask that a password be placed on the account, especially if the financial institution refuses to close it. This will also help to verify or authenticate you as the holder of the account.
• Warrants - It is possible that a criminal warrant will be issued, by the local prosecuting attorney, for a bad check (if written for more than several hundred dollars).  Once you make contact with the merchant or financial institution, ask if they have referred this to the police, the state’s attorney, or the district attorney’s office. If so, request that the merchant or financial institution contact that agency and request they withdraw that warrant.  The ITRC recommends you also contact the prosecutor. Find out what documents they need in order to clear the warrant. Make sure you receive a letter stating that the warrant has been withdrawn/cleared, and that your name is not in the warrant system.  Your name needs to be cleared from the local level database, state level database and national level database (if placed there).  You can call the “Court Clerk” in the county where the check was passed to find out if a warrant exists in your name.
• Contact all the check verifications companies listed below.  If a check is denied, ask the merchant which Check Verification company they use so you know where to start.  You have the right to have erroneous or fraudulent information removed from the report, upon written request and with proof (i.e. a police report or a collaborating letter from a bank, per FCRA).

Check theft:

• Notify your bank both orally and in writing. Immediately close this checking account and any connecting financial accounts. Request a Stop Payment be placed on stolen check number/s.
• Request for a “re-credit” or refund of the lost funds.
• Request your bank flag the check/s as stolen. Your bank should notify the receiving bank to hold the check intact for law enforcement purposes. In other words, ask them to flag it so they can make sure any accepting bank holds onto the check rather than destroying it as they are allowed to do under Check 21 – Refer to ITRC Fact Sheet 126.
• Get a copy of the check for your file - requesting a substitute check if you cannot get the original.
• Make sure you get a Letter of Clearance or confirmation from your bank that the account has been closed and is marked “closed due to theft and not to be reopened.”
• Save this letter and send a photocopy of that letter and the police report to any merchant who has accepted a check from the closed account.  ITRC Letter Form 126 may be used as a cover letter to the merchants, or check verification companies, which may have accepted fraudulent checks written with your information.
• Request letters from each merchant once they have declared that you are not responsible for the charges.  Keep these in a locked area for at least 10 years.
• Open a new account, adding a strong password so that no alterations can be made to this account such as change of address, adding additional users, etc., without your permission.
• Request that your bank notify all check verification companies.  Most check verification companies will not take information from consumers.

Pitfalls: Merchants don’t know this account is closed and may accept checks long after you have closed the account.  Be patient. They are also victims of this crime.  The other problem is that you may need to write many letters, depending on the activities of the thief.

RESOURCES:

To report fraudulent use of your checks:

• ChexSystems: (800) 428-9623
• Certegy/CPRS: (800) 437-5120
• SCAN: (800) 262-7771
• TeleCheck: (800) 710-9898

Several of these companies do provide a “consumer report.” Order reports from those that do provide them.  They should be free.

Security Alert on Consumer Reports
ChexSystems and SCAN will let you place a 90-day Security Alert on your consumer report with them.

Phone: 800-513-7125
or: 888-4-STOLEN
Website: www.consumerdebit.com

For instructions on how to place the Security Alert click ChexSystems

Related Links:
ITRC Fact sheet 126 - Check Account Takeover and Check Fraud

ITRC Letter Form 100-1 – Initial Victim of Identity Theft Statement and Fraudulent Account Information Request to Credit Issuers and/or Merchants

ITRC Letter Form 100-2 - Confirmation of Conversation / Letter of Clearance 

ITRC Letter Form 126 – Initial Statement of Checking Account Fraud

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This Solution should not be used in lieu of legal advice. Any requests to reproduce this material, other than by individual victims or their own use, should be directed to ITRC@idtheftcenter.org .

Copyright 2010, Identity Theft Resource Center ®, Created by the ITRC staff