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Committing Check Fraud? There’s an App for That!

Posted By Cliff Tuttle | August 27, 2011

No. 697

                                                                                                   Fidelity National Title Insurance Company issued a Bulletin to its Agents  warning about a new way to commit  check fraud. At a recent closing in Florida, a seller walked out of the closing room with a large proceeds check.  A minute later, he returned and requested a wire instead.  The title agent took back the check, marked it “Void” and initiated a wire.  Later, after the wire had cleared, the title agent learned that the check had cleared, too.  How could that have happened?  After all, the agent still had the check and it was marked void.  Right?

Not quite.  It took less than a minute for the seller to deposit the check. Yup, you guessed it!  There’s an app for that.

Remember the last time you went to Walmart and the cashier handed you back your check?  There were no marks on it — no way to tell that anything had happened.  Well, you can get a cell phone application that will deposit a check by the user taking a photograph and emailing it to the bank.  With a little practice, a con man could probably to do it in front of your face — provided.  of course, you don’t know what you are looking at.

A variation might be for a party to bring back the check, asking for it to be made out to a different payee.

And, of course, there is always an opportunity for embezzlement here, too. An employee can fill in a blank check from the back of the checkbook, photograph it, deposit it and destroy it.

One way  to protect yourself is to control the amount of cash in an account at any time. If the wire or the check (whichever was presented second) was for a large amount and the account did not have enough in it to clear them both, then the second to be presented will be returned.






CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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