Shame on Bank of America. It happened again. I guess it is different day, different tricks for the criminals in this world. Recently we learned the hard way how easy it is for criminals to commit check fraud using the modern convenience of mobile banking. I could not believe it when I saw an employee depositing his paycheck after taking a photo of it. And, while I will admit I now appreciate this convenience, I was uneasy when I saw that first deposit, and now I know why. The part that baffled me is that the depositor retains the deposited check. This seemed problematic to me, and it turns out to be a problem – one the banks aren’t talking about because, for marketing purposes, they want to promote convenience (which also means they can reduce staff – tellers – who are less critical if there are fewer deposits. I’m onto them!). Anyway, someone who received a check from us deposited it to her bank account and then, the next day, cashed it at a grocery store. This means 2 checks, with the same number, were processed by the bank. Did the bank catch it? You’ve got to be kidding; no, that would make too much sense! It was only because I saw something out of the ordinary on the monthly statement (reinforcing the need to check those) that I found it. The bank and its computers apparently couldn’t be bothered to do something to reduce fraud of such a simple type. Oh, they made good on the check and as far as I know did not “claw back” the funds from the grocery store which cashed it, meaning the bank is out double the amount. The amount was $200; the bank is thus out $400. But, who is really out any money at all. We, the people, that’s who! The bank does the right thing in making it good, but it is obvious to me that the fees we pay, and the money the banks make on our money pay for these fraud events. Again, as with my last example some months ago, the bankers lament how expensive fraud is. But, in my opinion, now reinforced, they are letting the criminals commit the crimes by: (1) making it easy – marketing convenience; (2) reducing staffing; (3) failing to do simple cross checks with their powerful computers – 2 checks, same number – don’t cash one, raise a red flag!; and, (4) failing to publically investigate, report, and prosecute the crimes. It is cheaper to allow fraud than pursue the criminals. So those inclined to commit the crime know they can likely get away with it. In this case, that is very bold, because the person deposited the check to a bank account and then showed her ID to cash it at the grocery store. How easy would it be to arrest her? What really gets me though, is that the bank is making this easy, yet is unwilling to do much about it, except. Except to tell me I need to change account types, pay higher fees, do more work – all of which would be unnecessary if they did their job of protecting my money. And, as I started out with “Shame on Bank of America,” I will conclude reiterating that because in the course of my investigation of this crime I learned that some banks, other than Bank of America, require specifically worded endorsements on checks deposited via mobile banking. For example, one requires the endorsement, in ink, “For deposit only to mobile banking, acct number 1234, signed.” Had the check in question had such an endorsement, I can’t imagine the grocery store cashing it. So, again, Shame on Bank of America!
The ability to perpetuate this fraud is simple enough for almost anyone to figure out; that is, anyone except modern day banking institutions. The person who stole from my company by electronically depositing a photo of my company’s check, then cashing the same check at her local grocery store, was an uneducated woman from a low socioeconomic neighborhood, about as far from being a genius as one could imagine. I am not saying this to disparage this fraudster in any way, only to point out that large banks have made fraud and stealing so simple that almost anyone who lives and breathes can commit these crimes. And, because the bank, on the surface, appears to do the right thing by not double charging our account, everyone moves on as if nothing bad happened. But something bad did happen! In this latest case of fraud against my company, a research participant stole $200 from my company and me! As a small business owner, I am painfully aware that Bank of America will find creative ways to penalize my company, me, and perhaps, other small business owners, for what happened, in the form of increased fees, requirements for different, “high security” accounts that cause more work for my partner to administer and maintain (and which, of course, have higher fees), and other inconveniences, all of which could be prevented by a few common sense procedures on the part of the bank. Although Bank of America is the bank that allowed this, and the other recent fraud against my company to be committed, it is my understanding that most of the larger financial institutions follow the same basic practices, due to a motivation to cut staffing and, of course, payroll. It is only the small, community banks that, these days, provide personal banking services, such as having people, instead, of computers, handle accounts. Sadly, for the time being, my company, my business partner, and I are “stuck” with Bank of America; I am dreading the next ever so creative scam our bank allows to be perpetuated against us.