We are experiencing an increased in identity fraud, where a noncustomer creates checks on customers' accounts. Luckly, in several cases this overdrew our customer's account and we could return the checks within the 24 hour rule. The question is are we required to file an SAR for each of these incidents?

In dealing with attempted fraud especially with washed checks, altered checks, if we can not determine the identity are we still required to complete an SAR?

Thanks Happy Labor Day to those that are laboring!

I think you will find Louise that the UCC and the NACHA rules allow for returns later than the 24 hour midnight return requirements. This may help in your decisions to return the transactions or not. When proven fraud occurs the return period is extended much longer that the 24th hour. We consider every customer complaint, but weigh each on several decision factors.

As for the SAR, considered complete without the name of person committing the crime. If it is, or isn't, we fill out the SAR to the fullest, retain the documentation, and mail the form after the BOD audit committee and executive committee has reviewed the circumstances. We belive the liabilities warrant mailing each fraud attempt, if substantiated. We may never know the names, addresses of each offender.

This only our procedure and not our recommendation
Mary Beth Guard will have very good advice on the SAR.

Late last year and early into this year we experienced a rash of this activity, the computer generated checks. In all I think we filed 3 or 4 SAR's. Of course you usually don't have the suspects name, so we left that blank. Fortunately for us though, one idiot actually was using his real name and just changed the ID and address information. It was an extremely frustrating time for us because you feel like it is so out of your control to stop it. A select few of us became overnight Private Investigators! Sadly though, we actually had one of our suspects in jail for another offense and I provided the FBI with a file 2 inches thick incriminating this guy and they let him go! Ugh! Bigger fish to fry. Of course, as soon as he was released from jail, he started right back up. Who says crime doesn't pay? I have documentation that it does for some.

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Who says crime doesn't pay? I have documentation that it does for some.

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MackenzieS - Do you have the SSN of the purp? Can you file a 1099 for the income he received?

The way I look at it, if we can't get our money back, then let the IRS go after the person.

We have several for him. Even if the bank did not take a loss on him, can that still be filed? We think we know which social is actually his though. Is the reportable amount determined by the value of what was received? I can tell you that this guys home office would be coveted by many of us! New computers, stereo equip, plenty of food from Walmart, etc... What a life huh? Do you think that he would be surprised to receive a 1099 IAO $13,000.00? It would be a pleasure to type that up personally.

If the Bank did not take a loss, then I'm not sure if you can file the 1099. However, SOMEBODY took a loss, and the fact of the matter is that income is TAXABLE. The IRS does not care if you earned the money legally or illegally - it's all taxable. That's how they got Al Capone in jail!

Not sure who you could call and ask, perhaps the IRS tipline?