Fraud: From stolen wallets to rubber checks
High County Business Review
Most small businesses don’t accept out-of-state personal checks. But in Eagle and Summit counties, local checks are the ones that most frequently bounce ” especially this time of the year.
“It’s ironic: (In other parts of the country), you see signs that say “no out of state checks,'” said Chris Doyle, owner of Bob’s Place in Avon. “But here, it’s actually quite the opposite. Most visitors have money in their account. It’s typically the seasonal employees who leave town before the summer (who write bad checks).”
Gary Koenig, owner of Affordable Music in Dillon, agrees, saying he’s never had an out-of-state check that wasn’t funded, but he has received bad local checks, especially in the spring. He once watched a man write a check for $300 worth of CDs. Koenig called the bank to verify funds ” which weren’t there ” and the customer insisted that he had just deposited the money. Koenig told him to come back the next day when the bank had registered the funds, but he never saw the man again.
Since 2003, when he started posting the bad checks he received on his wall, he hasn’t had a bad check.
“It makes people stop and think that they don’t want their name for everyone to see they’ve ripped someone off,” Koenig said.
Most business owners avoid taking personal checks when possible – Doyle has seen a decrease in bad checks in recent years because many consumers use debit and credit cards more. But a couple years ago, he tightened his check acceptance policy because customers passed a “fair amount of bad checks.” Now he only accepts checks numbered higher than 1000, he asks for identification and only occasionally gets bad checks. He’s also more alert during spring, which seems to be one of the best precautions to take against scams.
“It’s very difficult for the average consumer or business owner or even bank teller to recognize a counterfeit check, so you’re usually better off looking for the basic signs of a scam, instead of focusing on the check itself,” said David Nelson, a fraud specialist at the Federal Deposit Insurance Corporation.
Koenig looks for those signs, and, since he hasn’t had many bad checks from customers, he just began encouraging his customers to pay by personal check when he noticed that a recent .65 percent increase in Visa and MasterCard fees calculated to approximately the same amount of credit card and debit card debt reported in 2005.
“The small businesses take the hit ” they’re paying for that convenience (of customers using credit and debit cards,” Koenig said.
Most credit and debit card fraud in the High Country stems from stolen wallets, especially at festivals and crowded events, said Paulette Horr, public information officer with the Summit County Sheriff’s Office.
She said the Sheriff’s Office doesn’t receive a lot of counterfeit check reports, adding that a lot of businesses probably don’t report them because they know the process doesn’t go anywhere. The most recent reports involved Internet cases, one in which a Canadian tried to buy a local’s ATV with a fake cashier’s check, and another in which an Australian who owns a second home in Summit County reported a crook opening an account in his name and spending $10,000. Other recent incidents involved small counterfeit bills (from $5 to $20) passed at Arapahoe Basin and Copper Mountain.
The Vail Police Department doesn’t have information on fraudulent incidents, since all check fraud immediately goes to Investigator Rick Wallingford at the Lake County District Attorney’s office. Wallingford did not return calls asking for further information.
In the past, a cashier’s check was about good as gold. Times have changed.
In July, Land Title Guarantee Company in Summit County stopped accepting cashier’s checks for the entire amount of property purchases. The company, based out of Denver, made the decision after a number of people brought fraudulent cashier’s checks to closings in Eagle, Garfield and Pitkin counties, as well as Denver.
One situation involved a family who moved into the house they “bought” after giving Land Title a fake cashier’s check. They eventually went to jail.
The company also has stopped accepting cashier’s checks made out for more than the amount owned.
“Before the fraud, we didn’t have any reason to believe the checks were not good,” said Brook Valance, Land Title spokesperson. “Some bring extra money to pay off expenses related to closing, taxes, homeowner’s dues, transfer taxes.”
Land Title does still accept cashier’s checks, but only for partial payment. The rest must be wired. That way, the company covers its costs, which add up to approximately 10 percent of the transaction price, she said.
In other towns, not accepting cashier’s checks for the full purchase price wouldn’t make a big difference in customers’ experience, since many can’t buy properties with cash. But in Summit and Eagle counties, Land Title sees a lot of cash transactions, Valance said.
“We’re not trying to make it difficult,” she said. “We’re just trying to take precautions for the consumer.”
The company is also providing their closers with more training in recognizing fraud.