Skip to content

How to Handle Scams Involving Fraudulent Checks

Question: 
My question has to do with scams involving fraudulent checks and how we should handle the check when a customer presents it for payment. Specifically, we had a customer bring in a check for $2,900 that just didn't feel right for the type of business the customer normally conducts. The teller inquired about the check. The customer explained that he had enrolled online as a secret shopper. He was to keep $300 for himself and spend the other $2,600 buying specific merchandise to send back to the company that sent him the check. The teller called the bank on which the check was drawn and was told that it was fraudulent. We have had a law enforcement official tell us that we need to deposit the check anyway, put a hold on the account so that the funds are secured, and wait for the check to be returned so that we have a paper trail and proof that the check is fraudulent. In addition, once we have proof that the check is fraudulent, we should give the returned check back to the customer so that they can file a complaint with law enforcement. Is this the proper way to handle the check?
Answer: 

by Ken Golliher:

There are a lot of poor options. That's the dumbest one of all.

Depending on the circumstances, there is no legal hold that would assure you that your institution is protected. If you do not believe a check is good, do not take it or send it through the mail as a collection item.

Answer: 

by John Burnett:

Sending the check as a collection item should get you the same paper trail with evidence the check is fraudulent, and it keeps your customer from drawing on the funds during the collection process. Some law enforcement officials may have good intentions, but limited understanding of the "nuts and bolts" of banking.

First published on 07/15/2018

Filed under: 
Filed under compliance as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics