I own a small business acting as represenative payee. I write many checks as a large part of daily operation. Lately, folks have been noting the account and routing numbers then having custom checks printed using my account number and in the name of a party they have ID for. My bank has generally made good on them but other local businesses are refusing to cash checks with my account/routing on them. This will shortly put me out of business. I couldn't possibly change accounts fast enough to keep up. How can I protect myself from this kind of activity?
kaybee (K. Blanchard)
Diamond Discusser
Registered: 12/27/00
Posts: 4021
Loc: Mid-Atlantic Region
For bills that you pay by check you could check with your bank about "Positive Pay" where payments are made only after your okay. It is done electronically so it doesn't hold things up.
Rather than trying to cash checks around town can you get a small business debit card from your bank? That way you are in control of the card and the funds coming out of your account.
What other kinds of checks would others be "cashing" that are drawn on your business? Do you mean they are making purchases with checks on your account?
You could go to the local businesses you deal with, explain what has occurred, and tell them you are the only one who is authorized to present checks drawn on your business.
And of course I assume you have notified the police.
Why not set up accounts at some of the local businesses in order to make payments at a later date and with a specific person (accountant of the local business)? That way, your checks circulate VERY little and that particular risk is minimized. There are so many methods of payment these days that checks should NEVER be your only option. Good Luck.
_________________________
"Droplets of Yes and No in an ocean of Maybe."--Faith No More
OK, what I am is a contract represenative payee for SSDI and DSHS recipients who are incompetant and ineligible to receive payments directly. I receive the funds in their name an pay their fixed bills and write them checks to pay for specific purchases. We write thousands of checks for over a thousand clients monthly. The checks can go to any merchant or landlord and it isn't just local. I need to prevent unauthorized checks on this account. Perhaps I'm doing this all wrong. Is there a better way? My bank has turned in fraud reports but it gets old.
Wouldn't you identify the unauthorized checks when you balance your account? You should have a certain period of time (probably referenced in your account agreement with the bank) to notify the bank that these are unauthorized. The bank is liable, not you.
Now, at the point the bank starts taking losses on your account regularly, they are going to require you to move to "positive pay", which was described above.
My question is, why are you allowing these individuals to write checks on your businesses account? I understand these are probably the guardians of individuals you are accepting benefit payments for, but I wouldn't expect this is a safe way to run your business.
The problem you reference is a common one but not easy to fix. Someone wrote some forged / counterfeit checks using your routing and account number. Some of those checks were returned to the businesses that accepted them and now those businesses have your routing and account number on their "do not accept" lists. It's very possible that you have been reported to a large database of bad checks that's being accessed by thousands of businesses. Changing accounts doesn't help because your type of business is an easy target for counterfeiters & forgers. People with addictions are notorious for selling their checks to counterfeiters so they can feed their addictions.
Positive pay will protect you, but every time a counterfiet check gets sent back to the local grocery store that account is going to be flagged and your clients will struggle to cash their checks anywhere.
You might want to investigate stored value cards. You can load a specific value on the card for your clients to make their purchases and their fixed bills are paid directly from your office so the clients never see the checks. Stored value cards have some problems too, but it might be a workable solution in combination with the positive pay.
You need to sit down with your banker and pose the same question you've asked here. If he / she doesn't seem to have any answers, look for another banker.
_________________________
If you approach life with pure logic you can avoid almost all of the fun.
Quote: Wouldn't you identify the unauthorized checks when you balance your account?
I can and do, but it eats up a lot of time and I often wonder what slips thru.
Quote: You should have a certain period of time (probably referenced in your account agreement with the bank) to notify the bank that these are unauthorized. The bank is liable, not you.
Their solution is to require me to change accounts which is costly and impractical in the long run
Quote: Now, at the point the bank starts taking losses on your account regularly, they are going to require you to move to "positive pay", which was described above.
Never knew about Positive Pay. Is there a link to a site explaining how this worlks?
Quote: My question is, why are you allowing these individuals to write checks on your businesses account?
I don't allow them to do anything. Some of the checks they handle, such as for groceries. Others are problematic because their "landlord" is a friend. Once the routing/account is out, they do what they want.
Quote: I understand these are probably the guardians of individuals you are accepting benefit payments for, but I wouldn't expect this is a safe way to run your business.
I am the fiduciary, sometimes they have a guardian and sometimes not. Depends on what the state sets up. Yeah, I'm well aware it's not safe. That's why I'm asking questions.
It comes to me that I can't be alone. How do the folks in the business of "rebates" write tens of thousands of checks protect themselves. Once the account is displayed the recipient can do what they want. I've even had AOL accept the account number over the phone and debit the account. No sig, no authorization, nada.
Quote: The problem you reference is a common one but not easy to fix. Someone wrote some forged / counterfeit checks using your routing and account number. Some of those checks were returned to the businesses that accepted them and now those businesses have your routing and account number on their "do not accept" lists. It's very possible that you have been reported to a large database of bad checks that's being accessed by thousands of businesses. Changing accounts doesn't help because your type of business is an easy target for counterfeiters & forgers. People with addictions are notorious for selling their checks to counterfeiters so they can feed their addictions.
You have all that correct.
Quote: Positive pay will protect you, but every time a counterfiet check gets sent back to the local grocery store that account is going to be flagged and your clients will struggle to cash their checks anywhere.
I need to look at positive pay . My bank (BOA) has not mentioned it.
Quote: You might want to investigate stored value cards. You can load a specific value on the card for your clients to make their purchases and their fixed bills are paid directly from your office so the clients never see the checks. Stored value cards have some problems too, but it might be a workable solution in combination with the positive pay.
I'm assuming these are some sort of debit card that works sort of like a prepaid phone card but refillable. Any linls to a thorough description?
Quote: You need to sit down with your banker and pose the same question you've asked here. If he / she doesn't seem to have any answers, look for another banker.
I have to agree with that. They've been sympathetic and are quite helpful at identifying potentially fraudulent documents but don't have solutions.
Have you looked into balance reporting so that you can see what checks are clearing your account each day without having to wait for the statement? This is another common way to monitor your account activity and accelerate problem recognition.
Ok, I understand - when you said that your bank "makes good on them" I thought you meant they paid the items. You mean that they returned the items and recredited your account. This makes a lot more sense.
I agree with Greg - you ought to look into stored value cards. Sorry, I don't know offhand of a site that would explain them, but yeah, it would be a card that you "fill" with a certain value, and can "refill" again later. (A lot of universities offer this for their students/parents.)
You're probably going to have to go to a larger bank to find this service offered.
kaybee (K. Blanchard)
Diamond Discusser
Registered: 12/27/00
Posts: 4021
Loc: Mid-Atlantic Region
He said his bank is "BOA" which I assume means Bank of America. Not much bigger than that. B of A has all of the products we mentioned above. You might have a rep who is just not proactive. Ask about positive pay, balance reporting, stored value cards, etc. They should even have brochures on them.
Quote: With regard to your question about people who issue rebates - do you suppose that is why lots of large businesses are issuing "store credit rebates"?
I haven't taken notice of store credit rebates where I'm at but did consider this may be why OEM's haved offed the rebate business to rebate centers. Jeez, just put the product on sale already. Then we cut out the overhead on this.
Quote: Have you looked into balance reporting so that you can see what checks are clearing your account each day without having to wait for the statement? This is another common way to monitor your account activity and accelerate problem recognition.
What is balance reporting? A couple of the folks in the merchants section have been reviewing the account daily and alert us when something looks suspecious.
Quote: Ok, I understand - when you said that your bank "makes good on them" I thought you meant they paid the items. You mean that they returned the items and recredited your account. This makes a lot more sense.
I agree with Greg - you ought to look into stored value cards. Sorry, I don't know offhand of a site that would explain them, but yeah, it would be a card that you "fill" with a certain value, and can "refill" again later. (A lot of universities offer this for their students/parents.)
You're probably going to have to go to a larger bank to find this service offered.
You have that right except for the bank which is Bank of America. I Googled around and found a ton of sites, thanks
Quote: He said his bank is "BOA" which I assume means Bank of America. Not much bigger than that. B of A has all of the products we mentioned above. You might have a rep who is just not proactive. Ask about positive pay, balance reporting, stored value cards, etc. They should even have brochures on them.
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