A number of these posts have been conceptualized, while some, like this one, are written in moments of frustration. As business owners, my wife and I have many frustrations, but unfortunately, we have recently been (again) confronted by an instance of financial fraud. In the latest incident it appears we were the victims of someone (yes, we know who you are!) counterfeiting business account checks and then cashing them or paying a bill. With no help from the bank, I found the problem when reconciling the bank account. When alerted to the problem, Bank of America took halfway appropriate steps. Specifically, the bank reversed the fraudulent transactions and returned the funds to our account. The reason I say the bank took halfway appropriate steps is that it was clear that, once the reversal occurred, the bank wrote off the loss and closed the case. But, my partner and I want to bring the perpetrator to justice. The only way to stop fraud is to catch the fraudsters, right? Well, it seems it is too much trouble to do that, so the bank, or credit card company, just writes it off as a loss. But, that is not all they do. They surely find a way to charge it to their customers (us) in fees or by other means – if they really had absorb the loss, they would do something. And, they would tell the world they are proactive in prosecuting fraud. I have had 2 other memorable experiences with fraud, both involving my primary corporate credit card. In one, the fraud involved someone buying an $11,000 one way ticket to the Middle East on Delta; this was pre 9/11. The flight and seat number were right there on the bill. Did American Express send the authorities to the airport to see who used that ticket? I doubt it. The next time, someone used my credit card to buy hundreds of dollars in goods from a major catalog retailer. I called the retailer and they told me the address to which it was delivered, in Chicago. I reported this to American Express who seemed disinterested and then called my local police, who had no interest, and then Chicago police who seemed only slightly interested. These financial institutions do the right thing by reversing the fraudulent charges, and they go to great efforts to say what a huge problem such fraud is today. But, if they are doing anything about it, they sure are not telling me, their customer. It is not at all reassuring to a business owner to never be told anything about what is done to try to catch these criminals. We are the victims, even if they reverse the charges. And worse, I believe they let it happen. They are enablers by not policing it better. In the case of banks, checks can now be deposited by taking a photograph of the check. The security features in a check, like magnetic ink, do no good when a check is processed by photograph. Any decent color copier will create negotiable instruments to thieves to use. Rather than lamenting that fraud is a problem, these institutions should take steps to make it more difficult to occur AND they should catch the thieves and tell the world about it!
Having several thousands of dollars stolen from my bank account is, to me, a big deal. Furthermore, it is a big enough deal that I would like to see the thief apprehended and prosecuted for the crime. It seems, however, that my view about theft/embezzlement is not shared by large financial institutions, including banks and credit card companies. As David mentioned, Magnus (meaning David and me, of course) has been victimized on more than one occasion. In this most recent instance, we are 99.99999…% certain who stole checks from David’s office and forged his signature. I called local law enforcement in an attempt to press charges against the thief, even going so far as to provide the deputy who came to our office with this person’s name, address, telephone number, email address, vehicle license plate number, social security number, and parents’ address. The rather glum looking deputy informed David and me that, due to the fact the bank had returned the stolen funds to our corporate account, Magnus is no longer considered the victim; rather, the victim had become the bank. The deputy further said that, based on handling many past situations such as ours, he was certain the bank would decline to do anything to pursue the thief, due to the bank’s perception that several thousand dollars is “peanuts.” Sadly, if the bank does not press charges against the thief, law enforcement cannot do anything, such that the thief will continue this course of action at other businesses, stealing a few thousand dollars here and there for a long time to come. The bank may consider this write off a cost of doing business, but I am savvy enough to know that, eventually, commercial account holders such as my company will bear the brunt of the bank’s business costs, in terms of higher fees for services, including fees for “fraud protection,” resulting in a perpetuation of stealing. For those who naively believe crime doesn’t pay, the moral of this story is crime sometimes pays very well indeed.