Is your bank account secure?

A few weeks ago, our Senior Accountant, Rowen, found three withdrawals from one of our bank accounts that he did not recognize.

All three withdrawals were cheques that were out of sequence and that we had no record of. Rowen inquired about the cheques at our bank and was shown scanned images of the three cheques (which totaled close to $10,000.00).

The images showed a reproduction of the cheques that we use, minus our logo and with a couple of other minor errors (such as the bank address). However, the encoding on the bottom of the cheque matched our account and our company name and ‘Community Security’ tagline were on the cheques. The signature was a pretty weak forgery… but it looked good enough to fool at least one bank teller. Someone had obviously used one of our real cheques, and my signature, in order to make the forgeries.

Luckily, for us, because Rowen caught these cheques within 24 hours our account was credited with the full amount of the stolen money once I signed a statutory declaration verifying that we had no knowledge of these cheques.

We then spoke with both Bank Security as well as the Vancouver Police.

All three cheques had been made out to the same person, who we learned had an active account at our same bank… but in Surrey. Because her account had been active for many years, she was able to deposit the cheques and start withdrawing immediately at several ATM’s as well as at several Interac terminals.

Each of the cheques was deposited at a bank branch in Surrey, and withdrawals were made in Langley. The bank had video footage of the woman who cashed the
cheques at both the teller wicket, as well as at each of the ATM’s where cash
was withdrawn.

The bank advised us that this is a fairly common occurrence and that often times the simplest way to prevent an immediate recurrence is to close the account and open a new one. In terms of prudent security measures, we were told that we are already taking every reasonable procaution… namely that my signature must be on every cheque, we have custom designed cheques with several high-security features and that we secure our blank cheques at the office. Further, every document that leaves our office (in the garbage) is first shredded.

Most importantly for our own protection however, we reconcile our account balance daily by using internet banking. Had we not caught this fraud within the 24 hour period, we would not have been immediately credited for the amount and would have had to wait to get our money back. If we had waited too long, we could have been completely out of luck… or at least would have had to initiate a civil action to try and get our money returned.

This type of fraud is very common, and all a thief needs to create fake cheques is obtain/create a decent copy of a legitimate cheque… which is reasonably easy to access.

Beyond the inconvenience of having to deal with this issue, we were most concerned with trying to figure out exactly how someone had gotten ahold of our cheques.

After a couple of weeks, Rowen, who discovered the fraud in the first place, came across a random fax from 2005 that was in one of our vendor files. The last name of the Customer Service Rep from the company was the same as the person whom the fraudulent cheques were made out to. Adding to the coincidence, this particular vendor is based in Surrey … not too far from where the bank branch is located. This vendor has copies of at least one of our VOID cheques for the purpose of monthly withdrawals from our account.

With a little more investigation, it turned out that the woman who cashed the cheques is the stepdaughter of the employee.

The Police, Bank and this particular vendor are all looking further into the matter.

At the end of the day, this incident reminded us about how easy this type of crime is to commit. Luckily, most crooks aren’t smart enough to get away with it for long… but it does create a lot of inconvenience for victims.

To help prevent this type of fraud, or at least limit your risk:

  1. Reconcile your bank account and credit card statements as often as possible, ideally daily;
  2. Secure your blank cheques (we keep ours in a safe at the office);
  3. Do not throw out any old cheques without shredding them first.

Keep in mind though, that you can only do so much to control who gets to see your cheques… by far, the most important consideration is to check your statements regularly. Call your bank or credit card company as soon as you notice anything that you do not recognize.

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