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As a business and community focused bank working all day, every day with business leaders, we discuss what's effective in highly successful businesses today. Each episode features an interview discussing business practices on topics such as: company culture, fraud prevention, change management, economic data, wealth management tips, and more.
You can find more content like this on our website: https://www.nw.bank/newsroom/education/podcasts
Northwest Bank. Equal Housing Lender. Member FDIC.
Hello again, and thank you for joining me. I'm Luther Lampert, director of digital banking strategies with Northwest Bank. On today's episode, we're going to continue a conversation we started with Northwest Bank fraud department manager, Sara Harvey. On our last episode, we talked about impostor scams, how fraudsters might try and trick you into sending them money, and specific red flags to be on the lookout for to protect yourself from those scams. If you haven't already, I highly encourage that you check that out.
Luther Lampert:You can find all of our previous podcast episodes on our website, NW. Bank. We continued our conversation beyond impostor scams to cover check fraud. And that's going to be the focus of today's episode. So again, we're talking with Sara Harvey.
Luther Lampert:She is the BSA officer and manager of Northwest Bank's fraud department. She's been with the bank for sixteen years. She's been on the fraud team for eleven years. She has managed that team for seven years, and she brings that experience to our conversation around a check fraud. Sara, we we've been talking a lot about the impersonation scams and and potentially fraudsters trying to get money from you, but there are times where fraudsters will attempt to give money to you or give too much money to you, in the form of check fraud.
Luther Lampert:Can you explain how that works and some of the different check fraud scams that you've seen?
Sara Harvey:Yeah. You know, really, we see check fraud in a few different ways. I'm first gonna talk about check fraud that is debiting our customers accounts. So they're losing money or potentially losing money in these scams. You know, we could see this via a counterfeit check as in the customer did not issue that check.
Sara Harvey:These checks are completely bogus. They could resemble a customer's check, the the look of it, or they could be completely different where they look nothing like our customers checks that they normally write off their accounts. And the check number, check amounts could be large. You you can really write a check for any dollar amount and hope that there's funds in the account. So we'll debit it and not overdraw it and not be honored.
Sara Harvey:And so another version of check fraud could also mean a legitimate check that's issued off our customer's account, but it's altered. An alteration is when the check is washed, typically with some kind of chemical to remove the ink that was written on the check. Typically, you'll see this on the payee. They'll alter the payee name, they'll alter the dollar amount, or they'll do both. They'll alter the payee and the dollar amount on a legitimate check written by our customer.
Sara Harvey:Then the check will be negotiated by someone our customer did not intend it to be for and for possibly a higher dollar amount. And, you know, so this is why it's very important for our customers to monitor their accounts closely. Look online at your account every day to ensure counterfeit or altered checks are not clearing your checking account. If you do have questions about a check clearing, you call us right away. Checks, we have a short window of time to act on them.
Sara Harvey:So call us right away and we can help you review it and look to see if there's any, fraudulent situation involving that check. And if it is, we'll get it returned for you and then, you'll get credit right away for that check. But do not delay in notifying us if you have a check debiting your account that you're questioning. If you're a business customer at Northwest Bank, positive pay is a great fraud prevention for checks. This can also be applied to your ACH items.
Sara Harvey:This will allow the customer to input their checks that they've issued into the Positive Pay system. And if a check attempts to clear that was not issued, then our customer can set it to return and it's returned right away. This is only for business customers, but it really is a good tool to help mitigate against fraud regarding checks that are debiting your account. And then just since we're talking about writing checks, just a couple tips if you are writing checks. Use black ink.
Sara Harvey:Black ink is harder to wash. So we really encourage you to use black ink when possible. I think there are even some pens that you can use that can't be washed. If you can get your hands on those. Fill out the check completely.
Sara Harvey:Do not leave the payee line blank. In the line where you write out the dollar amount. Don't leave any spaces. If it doesn't fill the whole line, put a line through it so there's no extra spaces that somebody could add to your dollar amount. And then also use an alternate payment if possible, rather than paying by check.
Sara Harvey:So then on the other side of check fraud, like you alluded to Luther about our customers receiving checks. Yeah, another form we're seeing is it's a result of these counterfeit and altered checks. Our customers are depositing fraudulent checks into their accounts at Northwest Bank. You know, they're being told by somebody to deposit the check and then send part of the money back to another person, or back to them or even to a company, all before the check can be even discovered that it's fraudulent. Our customers are receiving these checks sometimes out of the blue, but most of the time they're receiving them as part of a scam.
Sara Harvey:They believe they were just hired for a job online and they received this check and they were supposed to go and purchase some of their equipment to perform the job. They might be selling something online, and they received a check from the buyer, but the check is for too much. It's for way more than what the purchase price was agreed upon. And typically, the check will not be from the buyer. So you're talking to the buyer online, you get the check, but the check is from a completely different person or even a company and typically out of the state, not in a bordering state to you.
Sara Harvey:It's somewhere completely different than, where you were expecting it to come from. Another reason they may receive a check is, applying for a loan online. They might get a check as part of this loan that you just applied for online. However, the check that you receive is from an account that you're the owner of that you did not open. We see this one often.
Sara Harvey:And so the check will come in and it will be payable to you and it's from you at a bank account that you do not own. Again, that should be a red flag that this is not a legitimate check because you do not own that account. In all of these, our customers are being told to deposit the check into their bank account right away. As soon as you receive it, deposit it into the account. A lot of times they're advising or instructing you to deposit it through mobile deposits or through the ATM.
Sara Harvey:So then you don't have to interact with a bank employee while you're making your deposit. So we see it through mobile deposit and ATM deposits quite often. And then once the check is deposited, they're telling you to use the funds. Somehow use the funds. And it's usually about 80 to 95% of those funds you're now sending to another person or you're sending to a company.
Sara Harvey:Our customers have sent the money out from their account through a wire, through cash, gift card purchases, or sending money through, you know, platforms such as Zelle, Venmo, Cash App. They might even come in and take cash out and again, mail it or put it into a Bitcoin terminal. The scammer in this is telling you to move quickly. They need you to do all of this the same day that you deposit the check. And they're doing that because they know the quick turnaround times for the check to be returned.
Sara Harvey:Once the bank that is issuing the check, they realize it's fraudulent, they will return it back to Northwest Bank, and then those funds will be debited from our Northwest Bank account that deposited it. By this time, our customers have already spent the majority of the funds, and then their account is sitting in an NSF status.
Luther Lampert:And so similar to the impersonator scams, the red flags, you went over them with with check scams as well. It's the urgency. It's it's too good to be true. They sent me too much money. It's I'm getting a check from some place I didn't think I'd be getting a check from.
Luther Lampert:So any other red flags with check fraud that differ maybe from the impersonation scams?
Sara Harvey:Really, you know, I think it all comes It's all similar red flags. But a lot of times I think with these ones, it's why did I get the check from the person I got it from? Because typically you'll get a check from who you weren't expecting it to be from. Your gut will tell you a lot and really just listen to your instincts, follow your gut. They're usually right on.
Sara Harvey:But yeah, biggest thing with the check fraud is the check you received is not who you were expecting it to be from.
Luther Lampert:We've talked about two different types of scams. Are we seeing one more than the other? Or are they both pretty common today?
Sara Harvey:I mean, really we're seeing the impersonation scam more than we're seeing check fraud. The impersonation scam is just very prevalent. It's not just at Northwest Bank, it is every bank is seeing it. And it doesn't matter the location, doesn't matter if you're in the Midwest, doesn't matter if you're in a bigger city, it is happening everywhere. But check fraud really is on the rise also.
Sara Harvey:US wide, across the nation, is, check fraud is increasing. Here in January, the FBI actually put out a public service announcement about check fraud, specifically relating to mail theft related check fraud. So this is how the check fraud is happening. Checks are being stolen from the mail. It's happening so often, the FBI and the postal service are putting, announcements out and public service announcements to let people know what is happening and how you can kind of protect yourself from that.
Sara Harvey:So a couple things that when I read the public service announcement from the FBI that I took away as key things to help Pick up your mail right away. Don't leave your mail that you've received in your mailbox because say you're getting a check from somebody. If you leave that in your mailbox, especially overnight, that's when people are stealing mail out of residential mailboxes. If you are mailing a check, use the mail slot inside your local post office for mailing checks as much as possible. That just lessens the chances of somebody else being able to access that check.
Sara Harvey:And then also consider paying your bills by electronic forms. You can pay through e check-in a lot of places, ACH by using your checking account number and your routing number, your debit card. These are safer than physical checks just because of the current fraud we're seeing in mail theft. If you feel like you are missing checks out of your mailbox that you mailed or that you were supposed to be receiving, get in touch with your local post office, the postal inspection agency, they wanna know about these. So, report it if you have suspicions that this is happening.
Luther Lampert:So, if any of our listeners have found themselves questioning a check that they've received or a text message that they've gotten and they've noticed these red flags, what should they do? I mean, they should let the bank know, but what other avenues should they report this to to maybe try and prevent this from happening to others in the future?
Sara Harvey:Yeah, you said it. The biggest thing, call your bank. If it has anything to do with your finances, call your bank. Stop in. Stop in and talk to your banker.
Sara Harvey:We have the training, we have the knowledge to help you report anything if it has happened or if it, you know, you're just at the beginning stages where you've gotten that text message. We can help you delete the text messages, block the phone numbers. We can also help you report to certain agencies that maybe need to know about what's going on. The FBI has an IC3 group. This is their cybercrime.
Sara Harvey:This is where a lot of these get reported because most of these scams start somewhere online, whether it's a Facebook message or it's an email or anything you do online, if it's part of the scam, report it to IC3. This FBI agency is great. They jump on these right away. If you're not comfortable reporting it to IC3, it's online. It's an online complaint center.
Sara Harvey:You don't have to speak with anybody. But if you're uncomfortable, come into your bank. If you allow us to report for you, we're just gonna ask for all the details. We're gonna ask about what all happened, but I'm happy to report it on your behalf. I have done this for other customers.
Sara Harvey:But obviously local law enforcement, if it appears to be a scam that's happening locally, go to your local law enforcement and report it to them. Your local FBI office, you can always call them, can always call the FBI and report. Postal inspector, if this is anything related to mail theft, report it to the postal inspector. Federal Trade Commission, a lot of these scams are reported to the FTC and what they do with this information really is it helps them create guides for training purposes to help others. Help others not fall for the scams that are going around and get the knowledge out.
Sara Harvey:FTC really wants to have this information so they can build those tools and potentially also go after these scammers also and help retrieve some funds that maybe have been lost. If any of this scam involves social security numbers or any of your private personal information, the credit bureaus or the social security office both should be contacted to make sure that your social security is protected.
Luther Lampert:Sara, a lot of great information today. Thanks for sharing that with me.
Sara Harvey:Thank you for having me. You know, this is my passion. I love what I do. I'm very passionate about fraud, but I wanna protect our customers. I'm trying to get the knowledge out.
Sara Harvey:I'm helping our team. So, you know, don't be afraid to stop in and ask questions. We're here to help. And this is, again, this is what I love to do. And this is my area and I'm happy to help you at all whenever possible.
Luther Lampert:Sara and her team and all of the staff at Northwest Bank are dedicated to helping protect your finances. If you ever have questions about something that's happening in your account, or that somebody is asking you to do within your account, please, please give us a call, walk in, ask us questions, so that we can help you. That's what we are here to do. You can find more resources to help protect yourself on our website. Head to nw.bank.
Luther Lampert:Make sure to check out our blog articles. There are a lot of great resources and stories in there on how to protect yourself and how to protect your privacy and your personal information. You can listen to other episodes of this podcast and also find some other resources and tools that we offer that you can use as our customer to help keep yourself and your business safe. Check out tools like NB Account Alerts, NB Card Secure, Positive Pay are all great tools to give you insight on what's happening in your accounts and keep your accounts safe. You can find all of that online at nw.bank.
Luther Lampert:Thank you again for listening. Keep checking our website for more episodes of the podcast. You can also find these podcast episodes on YouTube, Spotify, Google, and Apple Podcasts. Subscribe today to get notifications every time we release a new episode. Thanks again for joining us.
Luther Lampert:Again, more information online. Head to nw.bank for more. Thank you.