by: Angela Swinson Lee, Special to The Informer
Monica Ray, President of the Congress Heights Community and Training Development Corporation had been paying her contractors by checks for years. That system was working well until one day she learned that the routing and account numbers had been copied and the checks were being reissued.
Ray estimates roughly $35,000 had been stolen through check fraud before she realized what was going on. The fraudster used the same amounts as the actual checks, which made detecting it difficult.
David Berry, a Business Banking Development Manager at JPMorgan Chase, said check fraud, which centers around the money movement through checks, is on the rise. It comes in the form of fraudulent accounts and routing numbers, or it could be the case where a check number is transposed.
“The goal is to take money out of an account in hopes that the bank or account holder won’t realize that this is something fraudulent,” Berry said.
One of the ways small business owners can protect themselves against fraud is by eliminating paper checks, Berry said.
“When you look at a check, it has the routing number and the account number, and the check is physically floating. It may be floating through the mail. It may be floating once a person cashes a check. Some people write void. Some shred it. Some sit somewhere and the account and routing number could literally float across the world at any given time,” Berry said.
Berry advises clients to look for other ways to send money such as virtual digital payment, such as ACH or wire.
Chase also offers the bill payment option, which allows clients to send a check with the bank’s routing and account number and not the client’s information. That’s just what Ray has decided to do with her nonprofit and other businesses. At the time the fraud occurred, Ray wasn’t banking with Chase. It took her bank 60 days to reimburse the money after its investigation was complete.
Chase has created complimentary services for most business accounts to protect them against fraud. Check fraud prevention allows clients to go in and enter information around checks as they write them. The bank will compare what is in your registry with checks that have been written. If something doesn’t match, the client receives a notification.
Berry said it has been difficult for many businesses to avoid fraud. “I think most businesses have experienced a level of check fraud because it is very prevalent. It’s also the hardest to process. Most banks are running millions of checks through their system daily. They are trying to do whatever they can to catch it whether the check sequence is off or the signatures don’t match, but something may slide through the cracks,” Berry said, adding that wire fraud is also becoming common.
“When a wire transfer is sent it’s hard to recall the wire,” Berry said, adding that the sender must do due diligence by verifying they are sending information to the correct person.
He added that people should never accept an email that says an account number has been changed. If fraud does exist, Berry said to stop it immediately. “Wire is something where seconds matter.”
He also says that business owners should be intentional with vendors and employees and put policies in place beforehand, such as verifying information.
“Chase is a unique bank for business. It’s very tech savvy and tech-driven.”
Ray is glad that she switched to Chase nearly two years ago. “They have simplified our life in ways I didn’t know existed. I always had a bank account for our business but never had a true partnership,” Ray said, adding that she had never been able to get a loan or line of credit in 27 of the 30 years she has been in business. “Chase came to town in a way I have never seen a bank operate in our neighborhood. They have given small business owners access to business tools, financial literacy, and attaining lines of credit in ways we haven’t seen before. I would describe the relationship as being once in a lifetime for me.”
Follow Safety Best Practices
- Phishing is when scammers send emails that appear to be from reputable companies. Don’t open links in emails or texts unless you’re sure that they’re authentic. And never provide your usernames or passwords outside of the normal secure sites and apps you use, like the Chase Mobile® app and chase.com.
- Chase will never ask you for confidential information—like your username and password or other account information—when we reach out to you.
- Phishing is when scammers send emails that appear to be from reputable companies. Don’t open links in emails or texts unless you’re sure that they’re authentic. And never provide your usernames or passwords outside of the normal secure sites and apps you use, like the Chase Mobile® app and chase.com.
- Scammers have set up shop on social media selling items and tickets for what looks like a great deal. If a deal is too good to be true, it probably is.
- Help protect older adults from financial abuse. See how to prepare for the future and find resources to help avoid abuse.
- You can set up customized email, push, or text alerts that let you know what’s going on with your account and can take action if you suspect fraud.