I found the website for Qchex, and I am interested in the possibility of using the service both as a customer (to send checks) and as a payment method for the on-line purchases of the company I work for. Of course, before doing anything of the sort, I’ve been looking on the web for how secure those transactions can be. I think this is an excelent site to post my question, and get serious and reasoned advice.

I’ve found many complains about frauds committed using Qchex, including the ones on this forum. So far, the frauds seem to fall in two categories:

1- A thief gets hold of a valid bank account, and use Qchex as a method of withdrawing money from it. The money is usually withdrawn by cheating somebody into cashing it; by using some scam method. However, how the criminal obtains the account number doesn’t seem to be related to Qchex itself; he can use a phishing scheme, or steal it in some other way.

2- A scammer sends somebody a forged check, and tricks the victim into cashing it and returning some money to the scammer. In this case, Qchex has nothing to do with the scam; since they don’t verify any account information, the fact that the account is fake is - arguably - not their responsibility. No valid account is affected; unless the victim deposits the check and withdraws the money from his or her account. But Qchex has nothing to do with this transaction.

In summary, I haven’t found so far any reference to somebody complaining that a valid account number has been stolen from Qchex data. This is my question: Has any USER of Qchex has had his or her account information stolen as a result of using Qchex? And keep in mind that if the account number is stolen from the printed copy of the check is not a fault of the service; is the same risk one can have by mailing or handing a personal check.

I will appreciate any comments; but please refrain from advising against Qchex just because “it’s evil” or because “somebody sent me a fake check”. I understand those situations, and I understand people being angry and frustrated, but those comments wouldn’t be the type of opinion I can find useful.

Thanks.

Customer Joe - why would you seriously consider using a product that you know has been used fraudulently? And you admit that QCHECX "does not verify any account information." Now, if you are looking to use a reputable company for electronic bill pay, there are many out there. But I would stay clear of Qchex. Do I think they are evil? No, but I think they have gone a long way to damage the publics perception of electronic bill pay and banking in general.

In scenario #1 above, there is no need for a valid account number, just a valid bank RT# is needed. By the time the check gets returned to the bank of first deposit, the funds are usually long gone.

Several industry publications have detailed the Qchez issues, including that customers have experienced identity theft by someone else using their account and bank information to set up an account at qchex.

Don't know if that answers your question or not...

And I'll weigh in on the complaint comment - Qchex is very choosy about what they post and respond to - they have not responded to serious questions I asked them over a month ago -
And my question to you is - since you have to have a bank account to use Qchex, then why not use your own bank's internet bill-pay - so that all your record-keeping is in one place.

Qchex from bank viewpoint:

I think that you need to consider that Qchex does nothing to protect banks by not verifying their customers. They even tell their customers not to worry about fraud because they can just go to the bank and fill out a form and they get their money back. That money comes from somewhere.

As bank employees it is our jobs to try and protect the bank and its customers from fraud loss. I have yet to see a valid check from Qchex so the tellers at my bank have instructions to notify management whenever they see one.

How might this effect you as a user of Qchex? They make bankers nervous so I think that you will see the people that you send the checks to will have holds put on their deposits if they're accepted for deposit at all. Their bank may also inform them of the fraud that has been associated with these checks. In my opinion that might not be good for your company's reputation. I think that your bank may also watch your account a little more closely because of the fraud associated with these checks.

Any qchex that is presented to us goes to collection, so that will add time to any qchex transaction our institution processes.

OK, I had never heard of QChex till yesterday, and from what I've read here, there are serious problems, but still the occasional honest transaction in the mix too, no? Let me give you my scenario, because I'm really not sure what to do.

I have a ring that I would like to sell (asking $500), so I placed an ad on the local Craigslist, paying close attention to their warnings to only sell locally, the scammers are out there, etc. The first response to my ad was somebody in the UK who wanted to send me $4000 and wire the difference to their "agent." Yeah. No. Told him I didn't want to deal in any third party arrangements, and then filed a report at the FTC.

The next lady who responded said (when I asked) that she is in Spain. She didn't give any of the obvious red flags, just wanted to see a picture, then asked for my mailing address to send payment. Yesterday, I received the aforementioned QChex, in the amount of $1000 (again, I was only asking $500 for the ring). She has not, as yet, asked me to refund her any amount, or even given me an address to ship the ring to, so I haven't lost anything as yet, but as I said, I'm suspicious.

The business name on the check is a gas station in Maryland, but it's supposedly drawn on a bank in Louisiana. Now, I kept my bank account in Illinois for three years after I moved to Texas, so I know it's possible, but again... suspicious. There does appear to be a scanned signature on the check, but it's not a readable name by any means, so I have no idea what to make of that.

So, it's not the Nigerians, it's not for an amount that's hugely in excess of what I was asking, but it's still someone I don't really know sending me more money than I asked for from what is apparently an unreliable source. Is there any way to figure out if this is an honest transaction? Is there any risk to me if all I've given out is my name and my street address?

Thanks for your help.

There certainly is risk to you, specifically if you negotiate the check, then wire funds out, only to have the check be returned. You will be left holding an IOU to your bank for the funds deposited. Can you verify if this is valid? Certainly, pick up the phone and call the bank the item is drawn on to verify funds. Better yet, call the gas station listed on the check.

The question you should be asking yourself...why would a lady in Spain send you a check written from a gas station in Maryland and drawn on a Louisiana bank?

It's a scam, so far every Qchex I have seen has been a fraud. Call the account holder, they will be surprised to hear what their checks are buying.

Yeah, that was the first question I DID ask myself, which made me research the whole thing and find you fine folks here. And I've discovered more in surfing around that makes me less likely to believe it's an honest transaction.. So, if I don't negotiate the check (just tell her my bank wouldn't take it due to problems w/QChex or similar), though, I should be OK?

I advise my customers to sever all communication with individuals trying to pull off these scams. The more you talk to them, the more opportunity they have to try pulling fast one. Plus your name, email address, personal address, and whatever else you provide them, will be posted on every message board that they use and you will be flooded with additional fraud attempts. Simply let it go and wait for a legit response to your ad.

Hmmmm - and now multiple consumer, FIs and Retailers numerous complaints have ultimately forced Qchex to file a consumer alert with the FDIC-

Yet they still don't return calls or respond to legitimate emails from banks who are in their database fraudulently...

We are currently reviewing our process for accepting checks at the teller line with no maker signature, so....

Tex- Whenever you make those suggestions, do you ever get the "But we don't have time to look at every single deposit" argument? I get it and irritates the you-know-what out of me.

Typically, consumers are making these deposits and typically consumer deposits aren't more than a few checks. So, how freakin' hard is it?

Sorry. Little crabby.

We don't think we will SC - we try to keep our staff educated and informed on current fraud trends and since our bank was hit with bad paper last year, they're pretty aware of the $$ amounts that this can get in to -

And if we teach them 'correctly' - like you said, we should see this in consumer deposits primarily - we've already trained them to verify endorsements on deposits with fewer then 'x' items, to set deposits aside for manager review based on specific criteria - and I strongly feel that our group would say something anyway - what? No signature - what's this -

But, when I worked at one of the National Chains - that is the exact attitude I/we/they would definitely have had.

Interesting that this discussion is going on...

FDIC SA-82-2005 - Several reports of fraudulent checks created using an online service called Qchex.com

In that the discussion does pertain to the FDIC SPecial Alert, and many nonbankers using this forum are not familiar with this, here is the content:

TO: CHIEF EXECUTIVE OFFICER (also of interest to Security Officer)
SUBJECT: Fraudulent Checks Created Using Qchex.com
Summary: Several financial institutions, retailers and consumers have reported receiving fraudulent checks that were created using an online service called Qchex.com.


Several financial institutions, retailers and consumers have reported receiving fraudulent checks issued via Qchex.com, a subsidiary of Neovi Data Corporation, San Diego, California. Qchex.com is an online service that enables users to print checks or send checks by e-mail to recipients who could then print them. Financial institutions should be aware that some, but not all, checks created using this service may be fraudulent.

The fraudulent checks may bear actual routing numbers assigned to the drawer bank, along with either actual or fictitious account numbers. A signature is not required on the face of the check, and due to the microprinting aspect, the checks may bypass special handling requirements. The checks may or may not contain Qchex tracking codes.

Financial institutions, retailers and consumers should be aware that Qchex.com provides the following disclaimer: "Because user authentication on the Internet is difficult, you must make your own independent determination regarding the statements and representations of the other party and the party's ability to pay for the delivered good(s) offered for each transaction commenced through Qchex.com." In addition, the following disclaimer is provided under the section "Terms of Use" on the Qchex.com Web site: "Qchex does not guarantee, verify or investigate transactions undertaken by users of Qchex.com."

On a related matter, consumers have reported receiving fraudulent checks issued via Qchex.com for items sold over the Internet. In some instances, these checks were issued for an amount in excess of the actual transaction. Generally, in such circumstances, the sender of the check requested that the overpayment be returned via a wire transfer. Financial institutions should encourage their customers to view with extreme caution any proposed transactions requiring them to wire funds outside of the banking system. Given the nature of the activity, the FDIC has notified law enforcement.

Information about these instruments may be forwarded to the FDIC's Cyber Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429, or transmitted electronically to alert@fdic.gov. Information related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at http://www2.fdic.gov/starsmail/index.asp.

For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2005/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.

Michael J. Zamorski
Director
Division of Supervision and Consumer Protection

Can someone post a link to the consumer alert from Qchex to the FDIC, I received the Special alert, thanks

Special Alerts
SA-82-2005
July 12, 2005


TO: CHIEF EXECUTIVE OFFICER (also of interest to Security Officer)
SUBJECT: Fraudulent Checks Created Using Qchex.com
Summary: Several financial institutions, retailers and consumers have reported receiving fraudulent checks that were created using an online service called Qchex.com.

Several financial institutions, retailers and consumers have reported receiving fraudulent checks issued via Qchex.com, a subsidiary of Neovi Data Corporation, San Diego, California. Qchex.com is an online service that enables users to print checks or send checks by e-mail to recipients who could then print them. Financial institutions should be aware that some, but not all, checks created using this service may be fraudulent.

The fraudulent checks may bear actual routing numbers assigned to the drawer bank, along with either actual or fictitious account numbers. A signature is not required on the face of the check, and due to the microprinting aspect, the checks may bypass special handling requirements. The checks may or may not contain Qchex tracking codes.

Financial institutions, retailers and consumers should be aware that Qchex.com provides the following disclaimer: "Because user authentication on the Internet is difficult, you must make your own independent determination regarding the statements and representations of the other party and the party's ability to pay for the delivered good(s) offered for each transaction commenced through Qchex.com." In addition, the following disclaimer is provided under the section "Terms of Use" on the Qchex.com Web site: "Qchex does not guarantee, verify or investigate transactions undertaken by users of Qchex.com."

On a related matter, consumers have reported receiving fraudulent checks issued via Qchex.com for items sold over the Internet. In some instances, these checks were issued for an amount in excess of the actual transaction. Generally, in such circumstances, the sender of the check requested that the overpayment be returned via a wire transfer. Financial institutions should encourage their customers to view with extreme caution any proposed transactions requiring them to wire funds outside of the banking system. Given the nature of the activity, the FDIC has notified law enforcement.

Information about these instruments may be forwarded to the FDIC's Cyber Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429, or transmitted electronically to alert@fdic.gov. Information related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at http://www2.fdic.gov/starsmail/index.asp.

For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2005/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.
Michael J. Zamorski
Director
Division of Supervision and Consumer Protection

Distribution: FDIC-Supervised Banks (Commercial and Savings)



Last Updated 07/12/2005 communications@fdic.gov

Would these QChex be classified as a certain class of checks under CC? Can we or can we not hold them because of the controversey surrounding them...I would say collectibility is doubtable BUT I am basing that on the 'class' of check.

We ran into a QChex item - $8k, originated out of England, US bank R/T - sent for collection - returned - suspicious - hmmmmmmmmmmm.

Hi,
I was selling a motorcycle, and a man claiming to be from the Netherlands agreed to buy it for $850. A week later I got a QCheck for $2000, and he asked me to wire $1000 to his shipper who is in London, and the $150 is for taxes on selling to the DMV. I called the shipper (yes, it was a London phone number), and spoke to him, but I have a hunch that they are the same person. Before I had any suspicion, though, I had already cashed the check, and I have written a check for $1100 to my mother, which she has already cahsed. Most of the $1100 came from the $850 that was from the motorcycle. What should I do in this case, please? Western Union refused to wire the money to the shipper without fraud verification, thank Goodness, but I am still at a loss for what to do about this man, who now has my email and address, and who I am suspecting of fraud. Furthermore, my bank has not yet received any money to back the check up from his bank...The check had a "digitalized signature", which was a mosaic of pixels that looked distantly similar to a signature, but by no means was it discernible.

You are on the verge of losing money, Anon. Talk to your mother about the $1100 as you will need it to repay your bank when the check comes back, and it will.

Regarding this person knowing your email and address, I don't know that you are at risk. Tell him you know that the check is going to be fraudulent and that you will no longer correspond with him...that is usually the extent of it.

How long ago was this deposit made? Let the bank know about it, if you have not done so already.

First of all, I'd like to thank all of you that have responded. I've been away from the post for a while, and I'm just catching up.

I find interesting that most comments are still related to fraudulent use of Qchex, but there is not one complain of identity theft from the use of it. Happygilmore, for example, mentions the possibility of someone using my account to set up a Qchex account; but that means this someone getting hold of my account info beforehand.

Basically, the reason why I'm interested in this Qchex is this: I am not in the US, but I have friends and family there. I'd like to send some money to a friend for him to buy some things for me and bring them with him when he comes to visit. I'm talking transactions of less than $100 USD.

I even see a way to protect myself while using Qchex: I can open a bank account, keep it with minimum funds, and only fill it up when I need to send a Qchex. That way, even if my account info is stolen, I won't be loosing much.

So, I don't see a problem for me.

However, I wouldn't like my friend showing up at his bank, handing a Qchex, and being questioned or treated as suspicious because of it. Andy_Z's comment is very interesting, it means that financial institutions are or are getting aware of the risk of fraudulent use of Qchex. This raises a few more questions:

1- Are banks closing the doors on Qchexs; are there any banks not receiving Qchex because of the risk involved? I don't think a check for $50 or $100 will raise an alarm, but could banks be making tougher policies regarding these?

2- Can banks do that? I understand that it's anyone prerogative to accept a check or not, but does a Qchex have a "legal" value that must be honored by a bank?

3- And finally, the obvious question is, what alternatives to Qchex I could use? Keep in mind that many inter-banks operations are not an option; I can't for example wire transfer $50 if the transaction is going to cost me $60!

Again, many thanks for all your comments. I'll appreciate more opinions.

Anon:

Unfortunately, I have a similar opinion towards QChex, and yes it does stem from the problems I have seen with them clearing accounts...I guess that's just a disadvantage to being in the business (we're much more suspicious of items than the normal consumer ).

Let me prelude this by saying of course, I cannot speak for other financial institutions. I work for a fairly large bank in CA, when we are given a QChex check we will send it for collection, if we accept it at all. Our decision to accept this item for deposit will be contigent on the relationship we have with the depositor. If the depositor is someone with a average balance considerably larger thant he amount of the check, with direct deposit, and a decent history we may accept it with either an extended hold or send it off for collection. Either process can take weeks to get the funds into your friend's account.

Banks have no legal obligation to accept anything for deposit. You could walk into my branch with a cashier's check and I am not obligated to deposit it into your account. If I choose to do so, however, there are federal regs regarding when I can make these funds available. Basically, the fed does not regulate what we accept, it does regulate how we handle the items we do choose to accept.

Lastly, I would try for an international money order. I'm not sure about where you are from, but in the US we get these at our Post Office, they are fairly inexpensive and you can send them through the post to get to your friend. These checks will encounter less resistance and have a better chance of clearing without going through the collections process. Mind you, agian, the bank is not required to accept anything... much of the decision will be based on your friend's relationship with his bank. It may be in his best interest to explain the situation to a bank employee and see if they have any account-specific recommendations.

I with you the best of luck.

To Swedish Chef and Red Chevelle.

Thanks for your comments. I would also like to clarify that the previous "anonymous" post was mine, I forgot to log in.

For what I can conclude, it seems that in some cases - like mine - Qchex may work as intended: a mean to send money from a foreing country to the US, at very low cost (considering that the whole transaction is also for a few dollars); and since I am sending it to a trusted friend; the worst that can happen is that the check is not honored and nothing is lost. The waiting period for the clearing is soemthing already taken into account; again, in my particular case is not a problem.

This can also be a learning experience, both for me (as a tester of the service) as for my friends; I can make them aware of the existance of these Qchexs, and to be aware of their risks. If I do a test transaction, maybe I can share my experience and post it here.

Thanks everybody.

Customer Joe.

I recently received a QCHEX Check, printed by QCHEX and delivered from QCHEX in the amount of $3638.99 and it was returned, and now QCHEX is not responding to emails and I can not locate a physical address to send a certified letter to them since I have a Court Document advising them to make good on this check or face felony prosecution and of course NO ONE at QCHEX is responding, so I would watch QCHEX, they are a little bit shady.

They only printed the check. They have nothing to do with the payment of it. I don't understand how they could be forced to "make good" on it.

I don't like QChex (or checksonly.com), but if the check was unauthorized by the maker, then it's simply a bad check. The only entity that should be liable to you is whoever received the goods/services represented by that check.

I don't post here often, but I wanted to toss in my 2 cents' worth: As a security analyst at a mid-sized bank, I see Qchex drafts from time to time, and, like some others who have posted about them, I have YET to see one used for a legitimate purpose. I recently came across one that had just hit a customer's accout. On principle, I ordered the customer contacted to verify authorization--sure enough, fraud again.

In my opinion, this company serves no reasonable purpose, because there are plenty of other companies providing payment services with better security measures (which wouldn't be hard; ANY security measures are better than QChex). You reach a certain point where a company can no longer claim to be an innocent victim of a handful of scam artists who have found loopholes in their perfectly legal operation. These guys KNOW their service is being used fraudulently, and if you look on their website, they try to put the responsibility for preventing it on everyone but themselves. Sounds to me like an admission that they, for their part, intend to continue on their current course. At some point, some prosecutor is going to decide that QChex has willfully chosen to be an accomplice in fraud that will total in the millions of dollars when all the incidents are added together.

Mark my words: Sooner or later, we are going to see execs marched down the street in handcuffs, even if it means that some laws have to be tightened up to do it. I'm sure I won't be the only security person who breaks into cheers when it finally happens.

I'll be right there cheering alongside you.

Has anybody been to their website lately? www.qchex.com is now down

This is me, cheering!

It's about time.

After the site and their phones lines being down for at least 3 days they seem to open for business again, I wonder what caused their disruption? I hope we had something to do with it!

It would serve them right if they got a virus from one of their "clients".

I sure wish my bank would have stopped me from cashing my Qchex check that was sent to me. I am now in the hole for $6000.00 thanks to Qchex!!!

I get them almost every month from customers and have had no problems. Someone could order checks from any printing shop with your check information. Would that make the printing shop liable? Should they be required to verify the existence of the checking account and/or owner?

Paypal uses an email address for payments. What is the difference between Paypal and Qchex in terms of validating the owner of the account? It would be great if it was a perfect world for you bankers, but it ain't.

And my take on the scammees, anyone who participates in a scam trying to get something for nothing deserves being ripped off. Many people who purchased dot com stocks were "ripped off" trying to get something for nothing. Wake up...

Anon 418823- what world do you be living in??????
You evidently have some type of business where you provide a product or a service - when, if ever, is fraud attempted against you? Shoplifting, bad checks, etc? How much do you potentially lose - $50, $100?

Ok, now look at a bank - counterfeit checks presented in one operation cost our bank about $17k - and this happens all the time - why? Because banks have money - you should be glad that your bankers are looking for ways to prevent fraudelent losses - how would you transact business without your local bank. Instead of getting out your 'beat up on the whiny banker' stick, why don't you attempt to understand how our industry works - many of the bankers here on this website are happy to answer questions about why QChex has become such a malestrom a problem and it is to do both with the check clearing system being so automated and the limitations on returns. But feel free to jump to any conclusion you like, after this is still America!