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Identification is the Key to Prevention and Prosecution
Since it is impossible to eliminate check fraud by requiring that all purchases be cash transactions, check acceptance policies must be established and strictly followed to help prevent losses and enable us to prosecute fraudulent activity. As a result, your employees who accept checks should follow the following procedures.
Is
the “Check” a Check?
The person accepting the check must make sure that the “check” is
a check and properly completed. Examine the document presented. If there is
any question about its form, have it examined by an experienced supervisor.
We have been presented with documents that are not checks, i.e. such as check
stubs, merchandise discount certificates, receipts or promissory notes that
have been accepted as checks. Some even have been imprinted with the warning “This
is not a check” or “not
negotiable.” These are not checks and are not covered by the
check laws. However, we still may be able to prosecute the passer
for theft.
In the normal course of business, you or your employees may have contact
with seven types of checks and, in limited cases, money orders. These
checks are:
- Personal Check
This document is written and signed by the person offering it (the payer). The payee is the individual, organization or business enterprise that receives it. - Third Party Check
This is a check issued by one person to a second person who, in turn, endorses it for cashing by a third party. Third party checks are not subject to collection or prosecution. - Payroll Check
A payroll check is issued by an organization or business to an employee for services performed. Generally, it contains the printed name of the employer, a pre-printed number, and is hand-signed or stamped with an authorized signature. The word “payroll” also may be written on the check, the employee’s name may be typed or printed by a check-writing machine, and a device known as a check protector may stamp the amount of the check. - Government Check
This is a check issued by the federal, state, or local government. Such checks are issued for salaries, tax refunds, pensions, welfare allotments, and veteran benefits. The major problem with government checks is that a large percentage of them are distributed by mail, and therefore are subject to theft and forged endorsement. - Blank Check
The institution’s name is not evident on this type of document. Therefore, blank checks have fallen into disuse and most institutions will not honor them. - Counter Check
A counter check is available to depositors to withdraw funds when a personal check is not available. It is generally used at the issuing institution, but could be used at another financial institution upon verification of account. - Traveler’s Check
A traveler’s check is sold in pre-printed denominations to travelers who do not want to carry large amounts of cash. The owner signs the check at the time of purchase and countersigns it in the presence of the person who cashes it.
Is the Name and Address
of the Passer on the Check?
The check must have the name and address of the passer printed on it.
Do not accept a post office box address unless, through convincing
identification, you are satisfied a residence address is established
and written on the check. If the check is returned, neither you nor the
police will be able to locate the passer. The post office will not provide
an address for a post office box holder.
Can You Identify the Passer?
The person cashing the check should always ask to see the passer’s
driver’s license. Then they should record the passer’s
driver’s license number on the back of the check. If the number
is already printed on the front of the check, the person accepting the
check must compare that number with the number on the driver’s license
and, if identical, circle and initial it. Persons accepting checks often
handle so many transactions they cannot identify the person who passed
a particular check. Successful prosecution requires identification of
the passer; the official records of the Indiana Bureau of Motor Vehicles
can provide identifying evidence concerning the passer.
The person accepting the check should record the passer’s date of birth, sex, race, and telephone number on the back of the check. Abbreviations such as “W/M,” “09/30/40,” and (812) 547-1111 will help provide evidence to identify the passer. The telephone number does two things. First, if the person accepting the check is familiar with the area, the telephone number can provide a check on the validity of the address given and number given. For example, if a person’s address is in Tell City and the phone number given by the passer is (270) 745-1111, the person accepting a check may note the inconsistency that the telephone number is a Kentucky number. Second, it provides you and the police a convenient means of contacting the passer if the check is returned NSF. The birth date enables the police to quickly access information in the law enforcement computer systems.
The person accepting the check must compare the picture on the passer’s driver’s license with the person passing the check. The person and the photograph must look the same. If there is a trial because of a returned check, the person accepting the check may not remember the person. But when this comparison is routinely made, the person accepting the check can honestly testify “I looked at the person passing the check, and I looked at the picture on the identification, and I was satisfied that it was the same person.”
If the person doesn’t have a driver's license, another official picture identification such as an Indiana Identification Card, employee identification card from a local firm known to you, or passport, etc. may be acceptable. These identifications should not be accepted as the only identification, ask the passer for at least one other piece of identification such as a major credit card, health benefit card, or such other identification that convinces you that the check passer is the person named on the check. None of the identification mentioned above, except an official passport, has the reliability of a driver's license. The Indiana Identification Cards are verified solely by certified birth records, which can be stolen, borrowed, or obtained from the County clerk merely by signing an application and paying a fee. Social Security Cards are of little or no value, as the U.S. Government may not share information concerning the number holder with you or the police.
Does
the Passer Sign the Check?
If there is any doubt, have the passer sign the check again beneath the
signature and compare the signatures. Also, the signature on the check
should be compared with the signature on the passer’s driver’s
license or other pictured identification. Keep in mind the space on
the license is smaller than on a check, so an exact comparison cannot
be expected. And few of us are handwriting experts, but we can all discern
glaring inconsistencies between signatures.
Is the Numerical Amount the
Same as the Written Amount?
Make sure that the numerical amount on the check is the same as the written
amount. If not, request correction with the passer initialing the
correction.
Is the Check Made Payable to Your Business?
If the check is not made payable to your business, be aware. The implications
of “two party” and “business checks” are discussed
more fully under “Risk Assessment.”
Who Cashed the Check?
The person accepting the check must place his or her initials, employee
number, or other identifying marks on the front or back of the check.
In businesses having more than one employee, it is crucial for the Prosecutor
to be able to establish who took the check. Also a rule of evidence
makes the document admissible at trial if the person accepting a check
can identify it by his or her initials.
Is the Date on the Check the Same as the Date it is Presented?
The
implications of “post dated” checks are discussed more
fully under “Risk Assessment.”