Check Fraud Parts of a Check MICR LINE

Check Fraud

Parts of a Check MICR LINE

ABA Routing Numbers • 9 digits • Machine recognized and sorted • First two numbers indicate Federal Reserve District of Bank – Ex 01=Boston – Ex. 02=New York

ABA Routing Numbers • Third and forth number provide more specific location within Fed district • Digits 5 -8 indicate bank identification number • Last number is generated from an algorithm

Bank Account Number • Designates from which bank account the money will be extracted

Check Number

Fractional Code Numerrator=two digit state number and bank number Denomer: Fed Bank District

Pay to line Legal Amount Convenience Amount Customer Name and Address Date Bank Name And Address Memo Line Signature Line

Types of Check Fraud • Forgery: – Endorse stolen checks using phony I. D. • Counterfeiting: – Computer generation of a check or photocopying checks • Alteration of checks: – Chemicals to remove (check-washing) or alter check info

Types of Check Fraud • Paperhanging: – Writing checks on closed accounts • Check Kitting: – Creating fraudulent balances on open bank accounts

Signs of a bad check • No Perforations • Missing Check Number • Low check number (90% of bad checks are written on accounts less that one year old) • Customer name font different from address font • Check Data written by hand

Signs of a bad check • Customer address missing • Bank address missing • Stains or discolorations on check (erasures or alterations) • Checks in a group vary slightly in color • MICR numbers are shiny (Real Magnetic ink is dull) • MICR info doesn’t match other check data

Signs of a bad check • MICR #s missing • Payee info printed with a typewriter (most checks computer printed) • Check is VOIDED • Check lacks authorized signature

Check Washing • http: //www. youtube. com/watch? v=hq. SWxv smcz. I