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#126764 - 10/30/03 12:31 AM Ex-Employee writing checks on closed account
Kurth Offline
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Joined: Aug 2003
Posts: 11
We have an ex-employee who has written several checks on a closed account. It's pretty blatant. My institution has not taken a loss, but I would like to report this check writing activity to the police. Is there a problem with us doing this? I think it's this from Reg P:

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Regulation P

Sec. 216.15 Other exceptions to notice and opt out requirements.

(a) Exceptions to opt out requirements. The requirements for initial notice to consumers in § 216.4(a)(2), the opt out in §§ 216.7 and 216.10, and service providers and joint marketing in § 216.13 do not apply when you disclose nonpublic personal information:
...(a) Exceptions to opt out requirements. The requirements for initial notice to consumers in § 216.4(a)(2), the opt out in §§ 216.7 and 216.10, and service providers and joint marketing in § 216.13 do not apply when you disclose nonpublic personal information:
...(ii) To protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability;

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#126765 - 10/30/03 06:05 AM Re: Ex-Employee writing checks on closed account
Don_Narup Offline

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Las Vegas Nevada
Do you report all other checks returned on closed accounts to the police? Probably not so perhaps this is more about a situation regarding the former employee.

As no loss has been incurred by the bank what do you expect the police to do.

The people the checks were written to can make a ligitimate complaint that can cause them to take some action if the total dollar amout is sufficient to violate a fraud or intention to defraud a merchant law in your area. Other than that there is not a lot you should do.
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#126766 - 10/30/03 10:48 AM Re: Ex-Employee writing checks on closed account
Elwood P. Dowd Offline
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Don's comments are insightful; disregard the fact that this is a former employee and do what you would normally do.

Regulation P and its parallel regulations are not a source of authority for making a disclosure. Nor are they a source of authority for prohibiting a disclosure (other than an account number). All those regulations require is that financial institutions give consumers disclosures of their practices and, if they make disclosures other than those “allowed by law” they must give the consumer a chance to opt out. This is simply not a disclosure the consumer has a right to opt out of.

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#126767 - 10/30/03 10:05 PM Re: Ex-Employee writing checks on closed account
Anonymous
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Does this mean we cannot contact merchants who are being defrauded by someone who opened an account at our bank for $ 10, and is sticking every merchant in town with bad checks, or even worse, sticking one particular merchant with thousands of $$$ of bad checks? And are we precluded from preparing a spreadsheet that documents all of the merchants that were defrauded, and turning that over to our local D.A.'s Office? Seems the criminal has way more rights than the stores they are ripping off !!!

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#126768 - 10/30/03 10:52 PM Re: Ex-Employee writing checks on closed account
SMQ, CRCM Offline
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It is frustrating when our customers defraud other people, but as has already been stated, there is not a lot you can do about it. Your bank has not sustained a loss and you do not want to set yourself up for overstepping your bounds.

Your only other option is to pay the checks and then report the loss to the police --- but, I wouldn't recommend it.
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#126769 - 10/30/03 11:07 PM Re: Ex-Employee writing checks on closed account
Lestie G Offline

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Near the Land of Enchantment
Just a thought - is the ex-employee writing checks on one of their own personal accounts that's been closed, or one that they discovered was closed through their employment with you?
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#126770 - 10/30/03 11:20 PM Re: Ex-Employee writing checks on closed account
Kurth Offline
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Joined: Aug 2003
Posts: 11
It would be the x-emp's personal account. We've asked this person to stop writing checks, and I'm sure they'll end up on collections lists all over town, but we're talking an account that's had one deposit from the time they were employed, and checks written like water. Simmilar to a new account fraud situation. I guess if you still have checks in your book, you MUST still have money in the account, eh?! As far as being a victim, when we closed the account it was in the red from NSF checks and fees, doesn't that make us a victim?

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#126771 - 10/31/03 01:11 AM Re: Ex-Employee writing checks on closed account
Elwood P. Dowd Offline
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Joined: Aug 2001
Posts: 21,939
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Anon,
Since nobody said that, no, it does not mean that.

There are a number of circumstances where banks are required to contact law enforcement. However, they can voluntarily report almost any suspected violation of law - if they do it the right way. In no circumstance should the fact someone is a former employee be a factor in the decision.

If you are going to express indignation, make certain you are entitled to the "righteous" adjective that normally accompanies it.
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