Stolen Checks

"I don't have a bank account, because I don't know my mother's maiden name". - Paula Poundstone 

My wife has discovered the joy of online payments and online banking but a story from the Consumerist make me nervous. Some banking sites scan your checks and allow you to view the images online. These images may be stored on a 3rd party server by an independent image storage company whose security rules are not quite as strict as your bank's.

Russian crooks have broken into three sites that store archival check images, stolen the account information, and written over $9 million in phony checks against over 1,200 accounts. The security company that discovered this attack has notified the affected sites but it is not making their names public.

To avoid getting caught, the Russian crooks used "money mules".  Here's the story of an unwitting money mule:

A man found her "work wanted" ad online and contracted her to become a virtual assistant. He said that he was associated with the reputable international fashion marketing firm Mandi Lennard. The jobs started simple: buy this exact kind of ink and paper and perform various tasks. Soon he had her sending money for him to help one of the "photographers" purchase some alcohol. When she asked why he needed her to send the funds, he said "because i am very busy and you are my assistant."

Then she was instructed to print out a check for $1,300, deposit it in her account, and write a check off her account and mail it to her handler.

But when she did, the bank said it would be held for seven days while they investigated it for fraud. She soon received a call from a woman in Atlanta. It was her account the $1,300 check was drawn from, and the caller she was pissed and ready to press felony charges against her!

Bottom Line

Never, never agree to cash a check to your account and then offer some or all of the funds from your account (by check, cash, or wire service) to the person supplying the check. This is a very common scan and you're the one breaking the law by cashing a check that will bounce or one that is using stolen account information.