By Miriam Oh
“Is everything current?” A familiar question for check writers with which a simple ”yes” usually satisfies.
But what does this question, which may help financial institutions track down bearers of accounts with insufficient funds, do for consumers whose checks are lost or stolen?
What happens when merchants do not ask for identification for written checks? If check recipients do not ask for ID, how do they know if the person presenting the check, scribbling out a signature and saying ”yes” to the eminent question, then walking out with merchandise or a receipt for a paid-in-full bill, is in fact the person whose name appears on the check?
In most cases, merchants do not know and do not check.
Referred to as check fraud, this felony takes on many forms, and this crime in its simplicity occurs daily.
It could happen any time a check is written, according to the Francine Giani, director of the Utah Division of Consumer Protection.
In a Daily Universe review of some Utah retailers, most merchants surveyed do not have a policy requiring their clerks to verify a customer”s identity for checks.
Some merchants require identification for customers writing checks exceeding a certain amount; nearly all ask for ID before cashing a check and stores equipped with electronic check verification systems ask for ID only when prompted.
Sherry Ragan, criminal division chief for the Utah County Attorney”s Office, said this form of check fraud is easily perpetuated.
Ragan said most incidents of check fraud are drug-related and occur in crime rings where, among other things, criminals trade stolen checkbooks and information.
Ragan said offenders get a hold of checks in any way that unknowing consumers might be negligent of.
Aside from stealing checks, a good percentage of offenders use expired checks from closed accounts, as well as checks found in dumpsters and unattended storage units. And now more frequently abused, thieves are duplicating and using checks courtesy of advanced computers and high-tech printing and scanning equipment.
“Anybody can take a piece of paper and write an address on it and anybody who accepts a check without checking (their ID) first, hopefully either knows the person or can do without the money,” said Charles Bruce, director and founder of the National Check Fraud Center.
“Those who try to pass these checks usually succeed because merchants don”t check,” he said.
According to Ernst & Young, more than 500 million checks are forged annually, with losses totaling more than $10 billion.
One night in August 1998, Mindy Kemble of Salt Lake City, had stopped for groceries at a local market. She parked her car near the entrance of the store and exiting her car, she turned to lock the door. Swinging her purse over her shoulder, Kemble had not noticed the carload of young adult males racing towards her.
As the car whipped past Kemble, one assailant leaned almost full-body out of the car window, and latched onto Kemble”s bag. Instinctly, Kemble held on to her belongings as the car streaked through the parking lot, dragging her behind. Finally letting go, a shaken Kemble with a chafed side and road-burned khakis, lay in the dark parking lot in a daze.
The incident lasted no more than 10 seconds but Kemble said she learned the hard way how financially disastrous her purse in the wrong hands can be.
Kemble had just opened a new bank account and planned to close her old account the next day. The contents of her purse included her social security card, credit cards, driver”s license, checkbook and blank counter checks.
Kemble quickly cancelled her credit cards and although somewhat worried about her checkbook now in a stranger”s possession, never foresaw the looming problems.
Kemble tried to close her accounts but was told by both of her banks that that would not be possible. The banks told her that until fraudulent activity had taken place on the account, they could do nothing for her.
As Kemble waited, she began to receive notices for checks that were overdrawn on her account. Checks for hundreds of dollars written at various retail outlets, including Albertson”s and 7-11, were among many of the charges incurred in her name.
“They wrote checks to me with someone else”s stolen checks and deposited them, then started writing checks after that,” Kemble said. “The stores didn”t even check to see that the person writing the check was a guy and the name on the check was a girl”s!”
Kemble did not pay any of the charges incurred from her stolen checks. In most cases, banks or retailers end up eating the costs, but the financially distressing impact on consumers can be pricey and time-consuming.
“It is an absolute royal pain to clear up damaged credit and sort out bank problems,” said Jeff Buhman, deputy Utah County attorney. “While banks are sorting out account problems, people may be unable to cover their expenses because all their money is gone and they”ve incurred late fees and bounce fees.”
It took nearly two years for Kemble to sort through the financial damages.
Aside from writing bad checks, her offenders also used her social security number and driver”s license information to apply for credit cards – running up bills Kemble did not even know she had.
In most states, including Utah, it is illegal for merchants to decline service to customers who refuse to write their social security numbers on their checks, according to the NCFC.
Bruce advises that check bearers do not have their checks printed with their social security number and driver”s license number. Part of recording a driver”s license number is to check ID as well.
Campus offices, such as the Cashier”s Office and the BYU Bookstore, usually request that students write their ID number on their checks, which in most cases, is their social security number. University Communications representative, Michael Smart said a system that will reassign students new ID numbers should take place this calendar year.
Bruce said many retailers do not check for ID because it slows down lines and can be embarrassing, but he said businesses that do not check for ID bear the financial loss.
“Stores make a big error, frankly, a costly error in not checking for identification,” Giani said.
