When Ken Bell received his first voicemail in early July about a fraudulent check written on his business account, he thought putting a block on it would be the end of that problem.
Turns out it was only the beginning.
After returning calls to dozens more voicemail messages, hours spent working with banks and filing a report with the FBI, Bell is still trying to get the problem cleared up because one fraudulent check has now turned into more than 100, each written in different amounts for thousands of dollars. The checks attempt to draw from Bell’s business account, Best Recycling. One of the more recent checks was for $9,800.
The worst part is that it is preying on people looking for work, Bell said. With his business accounts now changed and better protected, the experience has mostly become a headache for Bell rather than a huge financial hit – it’s the people who deposit the fake checks and try to spend that money who lose.
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“It is just so insidious,” said Bell, noting he’s talked to some of the “nicest people” when returning calls of those being targeted who had suspicions something was wrong.
It started when someone got details of a Best Recycling check, including the bank’s routing number at the bottom. Fake checks were made and then help-wanted ads asking for secret shoppers were placed on websites, Bell said.
Those who answered the ads were sent checks that had the Best Recycling name on it, asking that it be deposited, then as a secret shopper buy something like an iPhone. The amount of the check is for more than the cost of the product, so the sender asks that any extra money (minus expenses and commission) be sent back.
It’s a classic check overpayment scam, and unfortunately some people are falling for it. Not only do they lose money for buying the product, but they are out the extra money sent to the scam artist.
Check scams, particularly using fake checks based on small-business accounts, appear to be on the rise. One reason is because the chip technology in today’s credit and debit cards are more difficult to crack, so scammers are instead printing fake checks.
Lynda Erickson, a Bellingham commercial banker at U.S. Bank, is familiar with Bell’s situation and she’s noticed an increase in check scams the past three months. She agreed that scammers seem to be moving away from trying to crack the credit card chip and focusing more on paper checks.
Erickson and other U.S. Bank employees have also attended fraud protection meetings with law enforcement where check fraud is being discussed more often.
“Typically what we’ve seen is the one-off check,” Erickson said, referring to someone trying to fraudulently use a found check, rather than taking the time to create a batch of new ones. “Fortunately in Ken’s situation someone felt something was odd and called.”
With Bell tracking down the checks and alerting people about the fraud, tactics by the scammer appear to have shifted. Lately Bell has seen more of the fake checks being used to try and get people to buy gift cards and send back extra money. Bell said he’s even heard from people who have received a fake Best Recycling check with no explanation whatsoever. Bell has talked to people where checks were sent as far away as Maine and Florida.
You’re much better off being proactive rather than reactive.
Lynda Erickson, commercial banker at U.S. Bank.
Bell believes he has also received a voicemail from the scammer, trying to get Bell to give out more account information.
Bell, who is also a candidate for a Port of Bellingham commissioner position, is talking about his experience because he wants to make sure others, particularly small-business owners, are aware of the scam. While many consumers are writing fewer checks with the rising popularity of online banking and debit cards, many small businesses rely on checks to pay vendors and delivery companies.
As Bell works through this fraud situation, he has started using Positive Pay. It is a service where Bell has to send information to the bank verifying he wrote a check before the bank will honor it. While there is an extra fee involved and more paperwork, Bell recommends using it. He also recommends business owners be even more vigilant about checking their accounts often to spot fraudulent activity.
Erickson also advises business owners to consider using Positive Pay. Business owners also need to make sure the checks are locked away, only to be taken out when it is time to pay a bill. Even with security improving on electronic payments, Erickson recommends using services that allow autopayers to use a scrambled account number so it isn’t copied and used later.
“You’re much better off being proactive rather than reactive,” Erickson said.