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Rev: 01 Nov 2004.
In July of 1999 my wife's purse was snatched while she was sitting at an upscale cafe.
The assailant took a small amount of cash, her license and health insurance card, a credit
card, and a money market checkbook with 8 checks in it.
We cancelled the credit card immediately, and had our mutual fund stop payment on the
stolen checks. We thought we'd gotten off lightly. HAH! It would have been much better to
have lost few hundred dollars in cash, or to have had bad charges on our credit card, than
to have lost those checks.
- The thief and their accomplices will be able to use the checks. They needn't
even bother to convincingly forge your signature.
- You may be vulnerable to identity theft,
particularly if the thief has obtained your social security number.
- You may be liable for the forged checks, though this is unlikely in most states. This
isn't like fraudulent credit card charges; there's no liability protection for check
forgery. In practice if you can show you took reasonable precautions you may not lose any
money -- but there are no guarantees.
If you stop payment (checks bounce at bank)
- If you are able to stop payment on the stolen checks so, then the checks will
"bounce". The vendor who's been stuck with a bad check will turn the check
over to their check service companies.
You will receive intimidating and threatening letters from these companies and from larger
vendors who have their own internal recovery programs. Some of the letters will allow that
the bad check might have been forged, others will assert that you are a thieving scum who
will be hounded forever. Sometimes the same check service company will send you both kinds
- You have to cancel your checking account. If checks have bounced, then your account has
been marked as 'bad' by the check
service companies. There's no way to undo this. You need a new account. You will have
to fix up your direct deposits and automatic withdrawl arrangements.
- If the thieves use your stolen driver's license to cash the checks, that license number
will be entered as 'bad'. You will not be able to use your driver's license to cash checks
again. If you are in a state, like Minnesota, where it is hard to change your license
number, you will be unable to use checks in the future. (Of course you probably shouldn't
use checks anyway!)
- For each bad check, you will have to submit an affidavit
of forgery. You will need copies of the police report! (You
must report this crime to the police, or you'll have a hard time proving forgery
If bank accepts check before payment can be stopped
If you don't stop payment, and you discover the forgery with your bank
statement, your bank will handle the matter. Surprisingly, this may be better than if
you'd stopped payment! The bank is likely to be a lot easier to work with, and they are
prepared to absorb the cost of the forgery (or fight it out with the merchant). They are
much less likely to destroy your credit rating.
Assuming you have a check book stolen, try the following:
- Notify the bank and stop payment on stolen checks and all non-outstanding checks. Open a
new account. Keep the old account only until outstanding checks have cleared, then close
- If your state allows you to change your license number, that may be worth doing.
- Consider trying to contact Check
Service/Recovery Companies before you hear from them and get started on the
tedious reporting function. Good luck trying to deal with them.
- Keep a log of everyone you speak to, including name, time of call, and what was
- Once a creditor confirms fraud, request that they send you a letter of confirmation. Check Service/Recovery Companies will
not send this automatically, you have to request one. You may need this in the future. In
any cover letter you write, request that this letter be sent you when your case is
- When speaking with any of the Check
Service/Recovery Companies, request direct numbers and extensions, especially 800
numbers. These are not easy to find.
- Contact law enforcement. Insist on getting a case number and attempt to get a report
filed and get a copy of it.
- Prepare a general file and a file for each creditor or Check Service/Recovery Company. Create
a standard cover letter with all important information that you can revise for each.
A notarized affidavit of forgery is your statement that you did not authorize use of
your check. It typically goes either to your bank (if they got stuck with the forged
check) or to a check service (recovery)
company if the merchant was stuck with the forged check.
Banks are pretty straightforward. The check service company may not be. Some
of them make the procedures clear, others make them deliberately hard to follow.
The package you send may include:
- The notarized affidavit of forgery.
- A copy of the police report.
- A copy of your driver's license.
- A cover letter; include in it any case numbers and the account number for the forged
- Do not carry checks. Carry cash,
traveller's checks, a check card, or a credit card. Checks should be stored in a locked,
secure box at home and never leave the house. If you must carry a check, don't have it in
your purse or wallet.
- Do not allow your social security number (SSN) to be used on any document that keep in
your wallet or purse. Many health insurance companies will use your SSN as an identifier;
most will honor your request to use another identifier.
- On the checks which you keep locked in a secure box at home, have printed below your
address the phrase 'CHECK PHOTO ID AND SIGNATURE BEFORE ACCEPTING'.
- Follow the general security procedures prescribed for
victims of credit card fraud. In particular, be sure to have the credit bureaus add a fraud alert to your
- Get a shredder and use it (see Identity Theft).
- Consider eliminating all use of checks (a minor act of revenge on the sometimes
obnoxious Check Service/Recovery
Check service/recovery companies are used by businesses to manage check transactions
and to recover funds for bad checks. They vary in professionalism from tolerable to
unpleasant. Any information you provide them may be used to 'collect a debt'; if the
service holds you responsible they will pursue you.
They are almost always confused and overloaded, with archaic information systems that
don't function well. As of Aug 1999 they are drowing under a tidal wave of forged checks.
The businesses that do check verification at the time of service are not
regulated (at least in Minnesota). If they decide to mark your license
number or check account as "bad" there's not much you can do about it.
The Check Recovery Companies (which may do verification as well) are regulated.
In Minnesota they are regulated by the Enforcement Division of the Department of Commerce.
If you have a good state representative (ours is excellent) they can provide you with
names and numbers to contact and help out if you have problems. A check recovery
service cannot collect on a fraudulent check (in Minnesota).
Some of the information and numbers below come from Equifax, at least one of those
numbers was incorrect.
Equifax-Telecredit Check Services
Reasonably professional, they provide a phone number for contacting them and you can
speak to a human. One of their two letters was pretty civil. Their 800 number is
800-337-5689. (Another number, untested, is: 800-437-5120)
TeleCheck Recovery Services, Inc
Their correspondence is unpleasant. Their letters don't tell you how to indicate that
the check was forged, you have to wade through their voice mail.
- 713-567-0499: general number. If you hit 0 at the first prompt you can get a human. If
you follow the standard menu you get a recording on where to send your materials (see affidavit of forgery). They insist you get your
own affidavit, they don't provide any.
- 800-710-9898: fraud office. Choose option 4 (report lost or stolen) to get a
representative. I'm told extension 4011 works, but I'm not sure how you enter it.
If you call their information number (), you'll find a voice mail message with
directions to write to their fraud office. The directions will repeat if you strike any
key. There's no way to reach a human. They want Fidelity to provide an affidavit of
forgery instead of us -- this makes no sense.
If they persist we'll be calling our State Dept of Commerce for help.
- March 18, 2004: reviewed links, added new ones for identity theft.
- Aug 19, 1999: added recommendations for action, more on check service
- Aug 13, 1999: regulatory information, clarified forgery against bank
- Aug 9, 1999: initial version.
Author: John G. Faughnan. The
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