check fraud identity theft holder in€¦ · the nilson report estimates check fraud losses to be...

• Check Fraud—A National Epidemic 1• Identity Theft 2• Check Fraud Prevention—Best Practices 4• Check 21 & Check Fraud 6• A Primer on Laser Printing 7• Check Security Features 8• High Security Checks 10• Holder in Due Course 14• Cyber Crime 16• Preventing Embezzlement 17

Inside this Issue

Check FraudIdentity TheftHolder in Due Course and

Check 21Volume 7

Check FraudIdentity TheftHolder in Due Courseand

Check 21Volume 7

• Check Fraud—A National Epidemic 1• Identity Theft 2• Check Fraud Prevention—Best Practices 4• Check 21 & Check Fraud 6• A Primer on Laser Printing 7• Check Security Features 8• High Security Checks 10• Holder in Due Course 14• Cyber Crime 16• Preventing Embezzlement 17

CHECK FRAUD AND IDENTITY THEFT, VOLUME 7 GREG LITSTER, EDITOR

FRANKLY SPEAKING . . .

he fastest growing financialcrimes in America today are

check fraud and identity theft.The Nilson Report estimates check

fraud losses to be about $20 billion a year.The American Bankers Association has statedcheck fraud is growing 25 percent per year.Check fraud gangs are hardworking andcreative. They constantly try new techniquesto beat the banking system and steal money.Historically, the banks have been liable forthese losses. However, changes in theUniform Commercial Code now share the losswith the depositor.

The Federal Trade Commission reportedthat nearly 15 million Americans have beenvictims of identity theft, costing consumers $5billion and banks and businesses $56 billionevery year. Because this crime is so simple tocommit, I believe identity theft will become oneof the most profitable criminal activities inhistory.

There are endless opportunities for acriminal to obtain the necessary information tocommit identity theft. Let me illustrate justtwo, beginning with your visit to a doctor. As anew patient, the receptionist asks you tocomplete a form that asks for your name,address, phone number, and your employer’sname, address and phone, and your healthhistory. They copy your insurance card, which

includes your Social Security number. Your co-pay is paid with a check drawn on yourbank account. You have just provided enoughinformation for someone to become you.

Another example. You walk into anupscale department store to make a purchase.You take your selection to the cashier andwrite a check. On that check is your name,address and home phone number, the name ofyour bank and its address, and your bankaccount number. The cashier asks for yourdriver’s license. In nine states, the licensenumber is your Social Security number. Thecashier memorizes the birth date on yourlicense, and then asks foryour work phone number,which will give them thename and address of youremployer. Once again, a thiefhas sufficient information toapply for credit in your name.

I am 59. As a teenager Idid things that today, as ahusband and father, aneducator and consultant, I amnot proud of. But, recountingone youthful experience maybe illustrative.

In my youth, when Iwanted to establish a new identity (so that Icould open a bank account and pass badchecks), I would go to the Department of VitalRecords (in any city I was in). I would ask tosee the death records for 1948, the year I wasborn. Every fifth or sixth entry was an infantwho had died at birth. I would write down thedeath information and later apply for a birthcertificate in that name. I would fill out aform, pay $10, and obtain a legitimate birthcertificate. I would go to the DMV and get alicense with my picture, my description, andsomebody else’s name. I had 50 legitimatedriver’s licenses.

Now, 40 years later, you can buy a CDROM with birth and death records, and can

apply for a new birth certificateby mail. There are Web sitesthat sell Social Securitynumbers for $49.95. Theiradvertisements claim that theycan tell you anything aboutanybody. I researched thesecompanies—all you provide issomeone’s name, address andDOB—and they will tell youeverything you want to know,

including spouse and children’s names. For the identity theft victim, the nightmare

has just begun. On average, it costs a victim$1,173 and 175 man-hours to get their creditreport straightened out. Fixing the problem isnot as simple as saying “…that wasn’t me.”You must prove you did not apply for that loan.To fix things, you must first convince the creditcard or finance company. Then, you mustconvince all three credit bureaus. In mostcases, the credit bureaus refuse to delete thedispute from your credit files. Instead, theyput an asterisk and say, “Customer disputesthis Visa charge, claims they were a victim of

identity theft.” The result is thatanyone accessing your creditreport, whether a potentialemployer or a companyconsidering granting you credit,may question whether you werereally a victim or if you were justripping somebody off.

I am personally concernedabout identity theft. A few yearsago, I subscribed to a servicethat notifies me each time mycredit report is accessed.Privacy Guard(www.privacyguard.com/frank)

provides me with the contact information ofany company that obtained my credit report,as well as the means to correct false data. I consider their annual fee money well spent.

This publication was written to helpindividuals and companies learn how to reducetheir risk of check fraud, identity theft andembezzlement. I hope you find it useful.Because there was not space to cover everyscam, I have included references to variousagencies and organizations with usefulproducts or information. I have written threebooks, The Art of the Steal, The Real U Guideto Identity Theft and Stealing Your Life thatcover numerous scams and solutions in detail.For individuals concerned about check fraud, I designed the Supercheck, a high-securitypersonal check with 12 safety features. I alsodesigned the SuperBusinessCheck andSAFEChecks for companies and organizationsthat want extremely secure checks. See Pages 10 through 13.

Sincerely,

www.supercheck.net

TT

© FRANK W. ABAGNALE 2008 Page 1 • CHECK FRAUD AND IDENTITY THEFT, VOLUME 7

ark Twain wrote in 1897,“…the report of my deathwas an exaggeration.” So,too, was the predicted

demise of the paper check in 1973. Now, 35years later, not only are checks still beingused, but they represent the largest categoryof non-cash payment instruments. Notsurprisingly, check fraud – the paper check’sevil twin – is the most dominant method offraudulent payments, and produces thegreatest losses. Check fraud continues to beone of America’s fastest growing and leastprosecuted financial crimes, and everychecking account holder, company, andorganization is at risk of becoming a victim.

In the Payments Fraud and ControlSurvey released by the Association of FinancialProfessionals (AFP) in March 2005, 55% ofthe organizations who responded confirmedthat they had been a victim of payments fraud.The vast majority – 94% – indicated theywere victims of check fraud. This was truewhether the organization was large or small.

In the AFP survey, only 7% of thecompanies reporting a fraud attempt did notlose money. In other words, 93% of thosereporting a fraud attempt did lose money. This data supports Mr. Abagnale’s conclusion:“Prevention is the only viable course ofaction.”

The Nilson Report indicates that annualcheck fraud losses now exceed $20 billion, upfrom $5 billion in 1993. BankInfoSecurity.comstated in November 2007 that while reportedcheck fraud cases decreased between 2003and 2006, the average loss per caseincreased 57%, from $1,098 to $1,727.

RISK MANAGEMENTThese statistics show that financial

institutions and checking account holders face

a substantial shared risk from check fraud.Executives must answer “How do we assessour risk? How much financial exposure are wewilling to assume? What real and hidden costswill we bear if we become victims of checkfraud? How might our image and reputation bedamaged? How much are we willing to spendto reduce our risk?”

UNIFORM COMMERCIAL CODEREVISIONS SHIFT LIABILITY

The legal basis for liability in check fraudlosses is found in the Uniform CommercialCode (UCC), which was revised in 1993. TheUCC now places responsibility for check fraudlosses on both the bank and its customers.Responsibility for check issuers and payingbanks falls under the term “ordinary care.”Ordinary care requires account holders tofollow “reasonable commercial standards”prevailing in their area and for their industry orbusiness. Under Sections 3-403(a) and 4-401(a), a bank can charge items against acustomer’s account only if they are “properlypayable” and the check is signed with anauthorized signature. If a signature is forged,the account holder may still be liable if one ofthe following exceptions applies:

First, if account holders’ own failurescontributed to a forged or altered check, theymay be restricted from seeking restitution fromthe bank. Section 4-406 requires customersto reconcile their bank statements within areasonable time and report unauthorizedchecks immediately. Typically, this meansreconciling bank statements as soon as theyare received, and always within 30 days of thebank statements being mailed.

Second, the concept of “comparativenegligence” in Sections 3-406(b) and 4-406(e)can also shift liability from the bank to thecheck issuer. If both the bank and the account

holder have failed to exercise ordinary care, aloss may be allocated based on the extent thateach party’s failure contributed to the loss. Theinternal controls used by a company whenissuing checks will be questioned to determinenegligence. Since banks are not required tophysically examine every check, companiesmay be held liable for all or a substantialportion of a loss even if the bank did notreview the signature on the fraudulent check.

STOP PAYMENTS AND HOLDERIN DUE COURSE

Placing a Stop Payment on a check doesnot end your liability to pay the check. Holderin Due Course trumps Stop Payments andPositive Pay exception items. See Page 14,Robert J. Triffin vs. Cigna Insurance Co.

Further, a company can be held liable forcounterfeit items that look virtually identical toits original checks. See Page 14, Robert J.Triffin vs. Somerset Valley Bank andHauser Contracting Co.

READ BANK CONTRACTSRead your bank contracts to understand

your liability for fraud losses under the revisedUniform Commercial Code. This specificallyincludes the small print on signature cardsand disclosure statements. It is clear fromrecent court cases involving fraudulent checksthat a bank’s intentions must be stated clearlyto prevail in a check fraud case against acustomer. Accordingly, banks are re-writingtheir signature card agreements to includenew provisions and requirements in theirdisclosure statements. For a summary of therevised UCC, visit www.FraudTips.net.

REMOTELY CREATED CHECKSRemotely created checks (RCC), also

referred to as “demand drafts”, “preauthorizeddrafts,” or “telephone checks” are created bythe payee on the authority of the accountholder on which the check is drawn. In placeof a signature, the check bears a statement inthe signature area that the account holderauthorized the check. They serve a usefulpurpose in that consumers can pay bills andavoid late charges, or purchase goods over thephone. Because remotely created checks arevulnerable to fraud, in most states the bankthat accepts a fraudulent RCC is liable for anylosses. Read more at www.FraudTips.net andclick on Remotely Created Checks.

CHECK FRAUD–A NATIONAL EPIDEMIC

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• CHECK FRAUD AND IDENTITY THEFT, VOLUME 7

dentity theft has grownexponentially over the past few

years, spurred by the financialrewards, the relative ease of

committing the crime, and the lowprobability of being caught. According to theFederal Trade Commission, nearly 15 millionAmericans are victimized each year,costing consumers $5 billion, andbanks and corporations $56 billionevery year. To clean up one’s creditreport and associated complicationsrequires an average of $1173 and175 hours.

Stealing wallets or purses wasonce the primary method to obtainanother person’s personal information.Today, “dumpster diving,” combinedwith Internet Web sites and searchengines, help criminals identify andexploit their victims.

Criminals gain access toindividuals’ credit reports by posing aspotential landlords, employers or loan officers.They “shoulder surf” at checkout lines andvideotape transactions at ATM machines tocapture PIN numbers. They steal mail frommailboxes for bank or credit card statementsand newly issued credit cards, and “dumpsterdive” in trash bins for credit card and loanapplications that have not been shredded.After combining key pieces of individuals’identities, they are able to impersonate theirvictims, obtain loans and steal the money.

Identity thieves are very brazen. In oneincident, the identity thief took out a lifeinsurance policy on his victim. In anotherincident, an identity thief was arrested aftertwo victims living in the same apartmentcomplex struck up a conversation about theirtravails. This coincidental conversationultimately led the police to arrest a person thatworked in the business office of the complexand had access to the rental applications andcredit reports of present and past tenants.

Contrary to popular belief, even peoplewith bad credit can be victims of identity theft.

Generally, victims of banking and creditcard fraud will be liable for no more than thefirst $50 of the loss. However, the victim mustnotify financial institutions within two days oflearning of the loss to avoid being responsiblefor the fraudulent activity.

Even though victims are usually notresponsible for paying their imposters’ bills,their credit report is always left in shambles.

It takes months or even years to regain theirfinancial health. In the meantime, they havedifficulty writing checks, obtaining loans andhousing, and even getting a job. Victims ofidentity theft seldom find help from the legalauthorities as they untangle the web ofdeception created by their imposter.

RECOMMENDATIONSConsider these recommendations to

reduce your potential risk of identity theft:

Social Security Number1. Guard your Social Security number

vigilantly. It is the key to your credit report andis the criminals’ prime target.

2. Do not print your SSN on your checks.3. Order your Social Security Earnings

and Benefits Statement once a year and lookfor employers you didn’t work for. Someonemay be using your identity for a job.

4. Monitor your credit report. It containsyour SSN, present and past employers, alisting of all account numbers, including thosethat have been closed, and your credit score.After applying for a loan, credit card, rental, oranything else that requires a credit report,request that your SSN on the application betruncated or completely obliterated, and youroriginal credit report be shredded once adecision has been made. (A lender or rentalmanager needs to retain only your name andcredit score to justify his/her decision.)

Internet / Computers5. Make sure your computer is protected

with Internet security software that is updatedregularly. See Cyber Crime, Page 16.

6. Do not download anything from theInternet that you did not solicit. Activate thepop-up blocker on your computer.

7. Shop only on secure websites. Theweb address should begin with https://. Itmust have the “s” or it is not a secure site. You can also look for a padlock or key in thebottom right corner of your screen.

8. Avoid using a debit card whenshopping online. Credit cards have a

maximum liability of $50 forfraudulent charges; debit cards cango up to $500 or more.

9. Use a real password. Whileit is easier for you to have one that issimple, it is also easier for crooks.

10. When possible, choose tohave a second-level password on anaccount. Choose a password that ismore difficult than your mother’smaiden name.

11. Never leave your laptopanywhere you wouldn’t leave yourbaby….in the car, in a gym bag, at arestaurant. According to

Amitron.org, stolen laptops and computersaccount for nearly 40% of security breaches.

12. Before donating your computer to arecycling center, completely wipe out allconfidential information. This requires specialsoftware, and more than just reformatting.

Credit Cards13. Shred old bank and credit card

statements, “junk mail” credit card offers andold tax returns. Use a crosscut shredder.Crosscut shredders cost more than regularshredders but are superior. When Iranianstudents in Tehran stormed the US embassy in1979, the embassy staff had shredded theirmost important documents; however, theyused a regular shredder. The enterprisingstudents hired carpet weavers andreconstructed the shredded documents.

14. Never give your credit card numberor personal information over the phone unlessyou initiated the call and trust that company.

15. When you are shopping or dining, beaware of how salespeople or waiters handleyour card. Make sure they do not have achance to copy your card.

16. Examine the charges on your creditcard when your statement arrives. Also, keeptrack of the billing cycles of your cards. If astatement doesn’t arrive when it should, itcould mean that a thief has changed themailing address on your account.

17. Minimize the number of credit cardsyou own to reduce the opportunity for a

IDENTITY THEFT IS ON THE RISE

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• CHECK FRAUD AND IDENTITY THEFT, VOLUME 7© FRANK W. ABAGNALE 2008

criminal to steal a card.18. Carry extra credit cards or other

identity documents only when needed.19. Shred the card on unused credit card

accounts. If you close the account, it maylower your credit score because of reducedcredit availability.

20. Put a fraud alert tag on your creditreport, which will limit a thief’s ability to openaccounts in your name.

Checks21. Use high security checks like those

shown on Pages 10 – 11. Criminals “wash”ordinary checks in chemicals, dissolving whatyou wrote without leaving evidence. After thecheck is dry, forgers insert new data. Highsecurity checks react to chemicals, showingthat they have been washed.

22. Do not mail checks from home. Theycan be stolen from your mailbox, chemicallywashed and re-used. Go to the post office.

23. When writing manual checks, use theuni-ball® 207 gel pen. Its ink will not dissolvein chemicals.

Miscellaneous24. Be highly suspicious of unsolicited

emails or letters that say you won money.25. Remove your name from the

marketing lists of the three credit reportingbureaus to reduce pre-approved credit offers.

26. Add your name to the Name DeletionList of the Direct Marketing Association(www.dmachoice/consumerassistance.php).

27. Subscribe to Privacy Guard oranother similar service to alert you if yourcredit history is being requested.

28. Avoid ATMs that are not connected toa bank or a reputable business. Shield thekeypad when entering your PIN.

29. Protect your incoming mail by pickingit up ASAP. If you will be away for a period of

time, have your mail held at the post office.30. Keep your purse or wallet in a locked

drawer at work. Find out how the companyprotects your personal information, and whohas access to your direct deposit information.

31. Photocopy and retain the contents ofyour wallet. Copy both sides of each licenseand credit card so you have the accountnumbers, expiration dates and phone numbersif your wallet or purse is stolen.

32. Keep Social Security cards, birthcertificates and passports in a locked box.

33. Read the privacy policies of thecompanies with whom you do business. Opt out of having your information shared.

34. Protect a dead relative. Contact thecredit bureaus and put a “deceased” alert onthe person’s reports. Send copies of the deathcertificate to institutions where the person hadan account.

SOMETHING FOR NOTHING“There’s no such thing as a free lunch.”

If something seems too good to be true, itisn’t. Thousands of people have been burnedby the “lottery” scam, which works like this:The “target” is emailed that he/she has won aprize, and that the first check will be sentsoon. Follow up emails explain that taxesmust be pre-paid on the winnings, but apartial payment greater than the taxes owed isbeing sent. The person is instructed to depositthe check, wire transfer payment for the taxes,and keep the balance. Final payment ispromised upon receipt of the taxes. Ofcourse, the first check is bogus and isreturned unpaid and charged back to theperson’s account. The person is liable tohis/her bank for the check’s face value, mostof which is gone. This scam has manyvariations, but they all offer something fornothing. Moral: If something seems too goodto be true, it isn’t. Google “Lottery scams.”

ALL THE RESOURCES YOU NEED.ALL IN ONE PLACE.

Even though you may take every possibleprecaution, identity theft can still happen to you.Consider these suggestions:

• Report the crime to the police immediatelyand get a copy of the police report.

• Keep a record of all conversations withauthorities, lending and financial institutions,including names, dates, and time of day.

• Call your credit card issuers immediately,and follow up with a letter and the policereport.

• Notify your bank immediately.

• Call the fraud units of credit reportingagencies to place a fraud alert on your nameand SSN.

RESOURCES• Equifax:

1-800-525-6285www.equifax.com

• Experian: 1-888-397-3742www.experian.com

• TransUnion: 1-800-680-7289www.transunion.com

• Federal Trade Commission: 1-877-IDTHEFT (877-438-4338)www.consumer.gov/idtheft

• Privacy Guard: 1-866-482-7363www.privacyguard.com/frank

• Privacy Rights Clearinghouse: 1-619-298-3396www.privacyrights.org

• Fight Identity Theft: [email protected]

• Identity Theft Resource Center: 1-858-693-7935www.idtheftcenter.org

• National White Collar Crime Center: 1-800-221-4424www.nw3c.org

• Social Security Administration 1-800-269-0271www.socialsecurity.gov

• U.S. Postal Service: 1-800-275-8777www.usps.com/postalinspectors


hen fighting check fraud,nothing is 100 percent.

No feature or program cancompletely eliminate check

fraud, and no prevention system is foolproof.However, specific practices can discourage acriminal from attempting fraud, and can thwarthis counterfeiting efforts. The following arerecommendations for reducing risk.

POSITIVE PAYOne of the most effective check fraud

prevention tool is Positive Pay, an automatedcheck-matching service that is unparalleled indetecting most bogus checks. It is offeredthrough the Cash Management Department ofmany banks. To use this service, the checkissuer transmits to thebank a file containinginformation about thechecks it has issued.Positive Pay comparesthe account number,the check number,dollar amount andsometimes payeename on checkspresented for payment against the list ofchecks issued and authorized by the company.All the components of the check must matchexactly or it becomes an “exception item.” Thebank contacts the customer to determine eachexception item’s authenticity. If the check isfraudulent or has been altered, the bank willreturn the check unpaid, and the fraud isfoiled. For Positive Pay to be effective, thecustomer must send the data to the bankbefore the checks are released.

Because revisions in the UCC imposeliability for check fraud losses on both thebank and its customer, it is in everyone’sinterest to help prevent losses. When acompany uses high security checks withPositive Pay, the risk and liability for checkfraud are substantially reduced. Many bankscharge a modest fee for Positive Pay, whichshould be regarded as an “insurancepremium” to help prevent check fraud losses.

REVERSE POSITIVE PAYFor organizations or individuals with

relatively small check volume, Reverse PositivePay should be considered. This service allowsan account holder to review in-clearing checks

daily to identify unauthorized items. Theaccount holder downloads the list of checksfrom the bank and compares them to theissued check file. Suspect checks must beresearched and the bank notified of items tobe returned. While Reverse Positive Payprovides timely information on a small scale,for larger operations it is not a worthysubstitute for Positive Pay.

POSITIVE PAYIS NOT FOOLPROOF

Positive Pay and Reverse Positive Paymonitor the check number and dollar amount.Several banks have developed Payee PositivePay (PPP) that also compares the payee name.PPP identifies the payee line by X,Y

coordinates on theface of the check,and uses opticalcharacter recognitionsoftware to interpretand match thecharacters.Matching the payeename, check numberand dollar amount

will stop most check fraud attempts, but it isstill not 100 percent effective because ofadded Payees above the X, Y field. A SecureName Font stops added Payees. See Page 7.

ACH FILTER OR BLOCKForgers have learned that Positive Pay

doesn’t monitor electronic “checks,” alsoknown as Automated Clearing House (ACH)debits. Files containing ACH debits arecreated by an organization or company andsubmitted to its bank. The bank processes thefile through the Federal Reserve System andposts the ACH debit against the designatedaccounts. Because paperless transactionspose substantial financial risk, most banks arecareful to thoroughly screen any company thatwants to send ACH debits. However, somedishonest individuals still get through thescreening process and victimize others. Bankshave liability for allowing these lapses.

To prevent electronic check fraud, askyour bank to place an ACH block or filter onyour accounts. An ACH block rejects all ACHdebits. For many organizations, a block is notfeasible because legitimate ACH debits wouldbe rejected. In this case, use an ACH filter.

In the electronic debit world, each ACHoriginator has a unique identifying number. AnACH filter allows debits only from preauthorizedoriginators or in preauthorized dollar amounts.If your bank does not offer a filter, open up anew account exclusively for authorized ACHdebits, and restrict who has knowledge of thataccount number. ACH block all other accounts.

PREVENTING ADDED PAYEESAdding a new payee name is a major

scam used by sophisticated forgery rings.They understand the limitations of Positive Payand simply add a new payee name above orbeside the original name. To help preventadded payee names, insert a row of asterisksabove the payee name, or use a Secure NameFont (see example Page 7). To help preventaltered payees, use high security checks likeSAFEChecks or the SuperBusinessCheck,and good quality toner to keep the asterisksand Secure Name Font from being removed.

HIGH SECURITY CHECKSCheck fraud prevention begins with high

security checks. Checks are the first line ofdefense, and help prevent altered payeenames or dollar amounts. There is substantialevidence that high security checks motivatecriminals to seek softer targets.

High security checks should contain atleast ten (10) safety features. More is better.Pages 10 through 13 show high securitychecks designed by Frank Abagnale. Manycheck manufacturers claim their checks aresecure because they include a printed padlockicon. The padlock icon does not make acheck secure, since only three safety featuresare required to use the icon.

Some legal experts suggest that thefailure of a business to use adequate securityfeatures to protect its checks constitutesnegligence. By using high security checks, acompany can legally demonstrate that carehas been taken to protect its checks.

CHECK WASHINGWashing a check in chemicals is a

common method used by criminals to alter acheck. The check is soaked in solvents todissolve the ink or toner. The original data isreplaced with false information. When a checkreacts to many chemicals, the “washing” canbe detected when the check dries. To defend

CHECK FRAUD PREVENTION–BEST PRACTICES

“Positive Pay is the best productin 25 years to deal with theproblem of forged, altered andcounterfeit checks.”

— Frank W. Abagnale

WW


against washing, use checks that are reactiveto many chemicals. Chemically reactivechecks become spotted or stained whensoaked in chemicals. A Chemical WashDetection Box on the back of the check warnsrecipients to look for evidence of chemicalwashing. See Page 13.

PROMPT RECONCILIATIONThe revised UCC requires an organization

to exercise “reasonable promptness” inexamining its monthly statements, andspecifically cites 30 days from the date ofmailing from the bank. Carefully read yourbank’s disclosure agreement that detailsthe length of time you have to reportdiscrepancies on the bank statement.Some banks have shortened the reportingtimeframe to less than 30 days. Failure toreconcile promptly is an invitation foremployees to embezzle because theyknow their actions will not be discoveredfor a long time. The people issuingchecks should not be the same peoplewho reconcile the accounts.

If you are unable to reconcile ontime, hire an outside reconciliation serviceprovider or accountant and have the bankstatements mailed to them directly.

REPEATER RULEThe repeater rule limits a bank’s liability.

If a bank customer does not report a forgedsignature, and the same thief forges asignature on additional checks paid more than30 days after the first statement containingthe forged check was made available to thecustomer, the bank has no liability on thesubsequent forged checks so long as it actedin good faith and was not negligent.

The one-year rule is another importantguide. Bank customers are obligated todiscover and report a forged signature on acheck within one year, or less if the bank hasshortened the one-year rule. If the customerfails to make the discovery and report it to thebank within one year, they are barred frommaking any claim for recovery against the bank.This applies even if the bank was negligent.

ALTERATIONSForgers and dishonest employees can

easily erase words printed in small type andcover their erasures with a larger type font.Prevent erasure alterations by printing checksusing a 12 or 14 point font for the payeename, dollar amount, city, state and zip code.See on Laser Printing.

MULTIPLE CHECK COLORSSome companies with multiple divisions

or branches use a single bank account againstwhich all checks pay. To differentiatelocations, they use different check colors foreach branch. This is not a good practice.When many colors of checks pay against anaccount, spotting counterfeit checks by colorbecomes an impossible task. A bank’s SightReview department cannot be expected toidentify a fraudulent or chemically washeditem when many colors are used. Use amaximum of two colors in the same account,and find other ways to differentiate locations.

MANUALLY ISSUED CHECKSEvery organization occasionally issues

manual checks. Some are typed on a self-correcting typewriter. These typewriters useribbons that are black and shiny. These blackshiny ribbons are made of polymer, a form ofplastic. Plastic is typed onto a check.

Forgers can alter manually issued checkswith ordinary translucent tape. They simplylay tape over the letters to be removed, rubthe tape firmly and lift off the tape. The typedletters are now on the tape, not on the check.Then they type in another payee name anddollar amount and cash the check, with theoriginal signature!

When issuing manual checks, use a“single strike” fabric ribbon, which uses ink,not polymer. They can be found in the catalogof major office supply stores. Single strikeribbons maximize the ink driven into the fibersof the paper by the typewriter.

CHECK STOCK CONTROLSCheck stock must be kept in a secure,

locked area. Change locks or combinationsfrequently to ensure they have not beencompromised by unauthorized individuals.Keep check boxes sealed until they areneeded. Inspect the checks when received toconfirm accuracy, and then re-tape the boxes.

Write or sign across the tape and the box toprovide evidence of tampering. Conductphysical inventory audits to account for everycheck. Audits should be conducted on aregular and frequent basis by two persons,including someone not directly responsible forthe actual check printing. When checks areprinted, every check should be accounted for,including voided, jammed and cancelledchecks, and those used to align the printer.

ANNUAL REPORTS ANDCORRESPONDENCE

Annual reports should not contain theactual signatures of the executive officers.Forgers scan and reproduce thosesignatures on checks, purchase orders,letters of credit, etc.

When possible, do not includeaccount numbers in correspondence.Credit applications sent to a new suppliershould include the name and phonenumber of the company’s account officerat the bank, but not the bank accountnumber. Nor should an authorized signeron the account sign the correspondence.You have no control over who handles thisinformation once it is mailed or faxed, andit could be used to commit fraud.

WIRE TRANSFERSForgers obtain bank account information

by posing as customers requesting wiringinstructions. Wire instructions contain all theinformation necessary to draft against a bankaccount. To avoid giving out primary accountnumbers, open a separate account that isused exclusively for incoming credits, such asACH credits and wire transfers. Place the newaccount on “no check activity” status andmake it a “zero balance account” (ZBA).These two parameters will automatically routeincoming funds into the appropriate operatingaccount at the end of the business day, andprevent unauthorized checks from paying.

Check fraud attempts and losses fell by 95% over three yearsafter a West Coast bank educated its customers and introducedhigh security checks and Positive Pay.

3500

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1991 1992 1993 1994 1995 19960

Attempts Losses

A WEST COAST BANKCHECK FRAUD ATTEMPTS/LOSSES

Introduction of- high security checks- Positive Pay- customer education


CHECK 21 & CHECK FRAUDheck Clearing for the 21st CenturyAct, aka “Check 21” was passedinto law October 28, 2004.

Check 21 allows banks to 1)convert original paper checks into electronicimages; 2) truncate the original check; 3)process the images electronically; and 4) create“substitute checks” for delivery to banks that donot accept checks electronically. The legislationdoes not require a bank to create or accept anelectronic check image, nor does it give an electronic image the legal equivalence of anoriginal paper check.

Check 21 does give legal equivalence to a“properly prepared substitute check.” A substitute check, also known as an imagereplacement document (IRD), is a new negotiable instrument that is a paper reproduc-tion of an electronic image of an original papercheck. A substitute check 1) contains an imageof the front and back of the original check; 2)bears a MICR line containing all the informationof the original MICR line; 3) conforms to industrystandards for substitute checks; and 4) is suitable for automated processing just like theoriginal check. To be properly prepared, thesubstitute check must accurately represent allthe information on the front and back of theoriginal check, and bears a legend that states“This is a legal copy of your check. You can useit the same way you would use the originalcheck.” While Check 21 does not mandate thatany check be imaged and truncated, all checksare eligible for conversion to a substitute check.

WARRANTIES AND INDEMNITYCheck 21 does not require a bank to

convert and truncate paper checks. It is voluntary. A bank that chooses to convert apaper check into an electronic image and substitute check provides two warranties and anindemnity that travel with the substitute check.The two warranties are 1) that the substitutecheck is properly prepared, and 2) that no bankwill be asked to make payment on a check thathas already paid (no double debit).

The Indemnity is very powerful, and givesbanks and companies a clear defensive strategyagainst losses caused by substitute checks. Itmay also deter banks and companies eager toconvert high-dollar checks. The warranties andindemnity continue for one year from the datethe injured party first learns of the loss1.

The Final Rule issued by the FederalReserve Board states, a bank “that transfers,

presents, or returns a substitute check…shallindemnify the recipient and any subsequentrecipient…for any loss incurred by any recipientof a substitute check if that loss occurred due tothe receipt of a substitute check instead of the original check.”2 It goes on to say that if a loss“…results in whole or in part from the indemnified party’s negligence or failure to act ingood faith, then the indemnity amount …shallbe reduced in proportion to the amount of negligence or bad faith attributable to theindemnified party.” The indemnity would notcover a loss that was not ultimately directlytraceable to the receipt of a substitute checkinstead of the original check.

The Fed gives this example. “A payingbank makes payment based on a substitutecheck that was derived from a fraudulent original cashier’s check. The amount and othercharacteristics of the original cashier’s check aresuch that, had the original check been presented instead, the paying bank would haveinspected the original check for security features and likely would have detected thefraud and returned the original check before itsmidnight deadline. The security features thebank would have inspected were security features that did not survive the imagingprocess. Under these circumstances, the payingbank could assert an indemnity claim againstthe bank that presented the substitute check.

“By contrast with the previous example, theindemnity would not apply if the characteristics ofthe presented substitute check were such thatthe bank’s security policies and procedureswould not have detected the fraud even if theoriginal had been presented. For example, if thecheck was under the threshold amount the bankhas established for examining security features,the bank likely would not have caught the errorand accordingly would have suffered a loss evenif it had received the original check.”3

REMOTE DEPOSIT CAPTURERemote Deposit Capture is a service that

allows a business to scan, image and transmitto its bank the checks it normally would deposit.While the technology is exciting, you mustunderstand your risk. Under the law, an organization that images and converts a checkissues the warranties and indemnity, and maybe held liable for any Check 21 loss. The statuteof limitations in the law for these types of lossesis one year after the injured party discovers thefinancial loss.

CHECK SAFETY FEATURESThe purpose of safety features is to thwart

criminals trying to alter or replicate checks. The minimum number of safety features a checkshould have is 10, and more is better. The bestsafety features are fourdrinier (true) watermarksin the paper, thermochromatic ink, and paper orink that is reactive to at least 15 chemicals.These safety features cannot be imaged andreplicated, and are the best!

When an individual or organization uses highsecurity checks that include these safety features,they are positioned for a built-in indemnity claimagainst the converting bank, as allowed underCheck 21. This assumes that their bank has aSight Review threshold such that the originalcheck would have been physically examined.

CHECK 21 FRAUD STRATEGIESIn a Check 21 world, the strategies are

straightforward. 1) Every bank should offerPositive Pay at an affordable price, and everycompany and organization should use theservice. Most banks charge for Positive Pay;consider the fee an insurance premium. Foruseful information about Positive Pay, visitPositivePay.net and SafePay123.com.2) Make large dollar payments electronically. 3) Every company, organization and individualshould use high security checks with 10 or moresafety features. The checks should include atrue watermark, thermo chromatic ink and 16+chemical sensitivity. The Supercheck, theSuperBusinessCheck, and SAFEChecks(See Pages 10-13) were designed by FrankAbagnale with these and many additional safetyfeatures so prudent individuals, companies andorganizations could enjoy maximum securitywith a controlled check. Visit Supercheck.netand SafeChecks.com to request a sample. 4) Avoid using laser checks that can bepurchased by multiple people entirely blankbecause the stock is not controlled. 5) Banks should lower their Sight Reviewthresholds and re-train inspectors, andencourage their customers to use high securitychecks and Positive Pay.

1Visit www.FraudTips.net for a copy of the Act, and the Federal Reserve Board’s Final Rule governing Check 21issued July 26, 2004. Read Page 67(c) Jurisdiction.2The Fed’s Final Rule, page 58, Substitute Check Indemnity.3ibid., pages 99-100, Substitute Check Indemnity.Frank Abagnale has co-authored a white paper on Check 21 and image survivable safety features. Downloaded itat www.FraudTips.net under Check 21.

CC


any companies andorganizations print checkson a laser printer. This

technology is highly efficient,but proper controls must be in place or laserprinting can invite disaster.

TONER ANCHORAGE, TONER,PRINTERS

To prevent laser checks from being easilyaltered, the toner must bond properly to the paper.This requires check stock with toner anchorage,good quality toner, and a hot laser printer.

Toner anchorage is an invisible chemicalcoating applied to the face of check paper.When the check passes through a hot laserprinter, the toner melds with the toneranchorage and binds onto the paper. Withouttoner anchorage, the toner can easily bescraped off, or lifted off the check with tape.

High quality toner should be used becausepoor quality toner does not meld properly withthe toner anchorage. Also, if the printer is nothot enough, the toner and anchorage will notmeld sufficiently. The fuser heat setting can beadjusted on most laser printers through thefront panel; hotter is better.

BLANK CHECK STOCK

that is not customized for each customershould be avoided. If a printer or computercompany will sell you entirely blank checks,they may be selling the identical checks toothers, who, in effect, have your check stock!Ensure that your check stock is not availableentirely blank to others. It should be uniquelycustomized in some way for each user.

Recent court cases have shown usingplain checks may contribute to the alterationor replication of a check. Issuers of such

checks may be liable for the resulting losses.See Page 14 Robert J. Triffin v. SomersetValley Bank and Hauser ContractingCompany.

IMAGE SURVIVABLE“SECURE SEAL” TECHNOLOGY

is a new, state-of-the-art encryptedbarcode that is laser printed on the face of acheck. The barcode contains all the criticalinformation on a check – payee name, dollaramount, check number, routing and accountnumbers, and issue date. The barcode can be“read” using Optical Character Recognition(OCR) technology and compared with theprinted information on the check. If theprinted data does not match the barcode, thecheck can be rejected. This technology isimage survivable. Some software providersalso include Secure Name and Number Fonts.

SECURE NAME FONTS

help prevent added or altered payeename. In many cases, altering the Payeename allows the forger to circumvent PositivePay. A Secure Name Font uses a uniqueimage or screened dot pattern in a large fontsize to print the payee name. This makes itextremely difficult to remove or change thepayee name without leaving evidence.

SECURE NUMBER FONTS

prevent the dollar amount on the checkfrom being altered without detection. Somefonts have the dollar amount image reversedout, with the name of the number spelled insidethe number symbol. Although Positive Paymakes this feature redundant, it is a strongvisual deterrent to criminals.

PASSWORD PROTECTION

is critical for every system. A companyhas more exposure from dishonest employeesthan from a hacker. At least two levels ofauthority (passwords) should be required toprint checks, add new vendors, and add orchange employees and pay rates. Employeepasswords should be changed from time totime, and audit procedures must ensure thatpasswords are never shared.

STRING OF ASTERISKS

placed above the payee line can preventadded payee names. Forgers often add a newpayee name above or after the original payeename. To prevent these alterations, insert astring of asterisks above and after the originalpayee name. (Do not use asterisks when usingPayee Positive Pay. The asterisks cause falsepositives.) Asterisks can be pre-printed on thechecks by the check vendor.

SEQUENCED INVENTORYCONTROL NUMBERS

are numbers printed in sequence on theback of non-pre-numbered laser checks. Thecontrol number is completely independent ofthe check number printed on the face of thecheck. Numbering is essential on laserchecks that are not pre-numbered becausethey assist in tracking each sheet and inmaintaining compliance with auditors. Insistthat your check manufacturer print asequenced control number on the back ofeach unnumbered check, and keep a log ofevery check run.

A PRIMER ON LASER PRINTING

SECURE NUMBER FONTS

SECURE NAME FONT

IMAGE SURVIVABLESECURE SEALTECHNOLOGY

TONER ANCHORAGE

MM


CONTROLLED PAPERis manufactured with many built-in

security features, such as a true watermark,visible and invisible (UV light-sensitive) fibers,and multi-chemical sensitivity. To keep thepaper out of the hands of forgers, the papermanufacturers have written agreements thatrestrict the paper’s use and distribution. Askfor and read the written agreement. If there isnone, the paper may not be controlled.

CONTROLLED CHECK STOCKare high security checks that are printed

on controlled paper. The check manufacturerdoes not allow the checks to be sold entirelyblank without it first being customized. Askyour check printer for their written policy aboutblank check stock. If there is none, the checkstock may not be controlled.

FOURDRINIER WATERMARKSare faint designs pressed into the paper

while it is being manufactured. When held tothe light, these true watermarks are easilyvisible from either side of the paper for instantauthentication. Copiers and scanners are notcapable of replicating dual-tone Fourdrinier(true) watermarks.

THERMOCHROMATIC INKSreact to changes in temperature. Some

thermo inks begin to fade away at 80°F anddisappear completely at 90°F. The ink then

reappears when the temperature cools to78°F. Thermo ink’s reaction to temperaturechanges cannot be replicated on a color copieror laser printer.

EXPLICIT WARNING BANDSare printed messages that call attention

to the security features found on the check.These bands should instruct the recipient toinspect a document before accepting it, notmerely list features, and may discouragecriminals from attempting the fraud.

MULTI-CHEMICAL REACTIVEPAPERS

produce a stain or speckles or the word“VOID” in multiple languages when activatedwith ink eradicator-class chemicals, making itextremely difficult to chemically alter a checkwithout detection. Checks should be reactiveto at least 15 chemicals.

COPY VOID PANTOGRAPHSare patented designs developed to protect

a document from being duplicated. Whencopied or scanned, words such as “COPY” or“VOID” become visible on the photocopy,making it non-negotiable. This feature can becircumvented by high-end color copiers.

LAID LINESare unevenly spaced parallel lines on the

back of the check. They make it difficult tophysically cut and paste dollar amounts andpayee names without detection.

PRISMATIC PRINTINGis a multicolored printed background with

gradations that are difficult to accuratelyreproduce on many color copiers.

LAID LINES

CHECK SECURITY FEATURES

COPY VOIDPANTOGRAPHS

FOURDRINIERWATERMARKS

THERMOCHROMATIC INK

MULTICHEMICALREACTIVE PAPERS

n response to the alarming growthof check fraud, the check printing

industry has developed many newsecurity features. The best features are

illustrated here. While nothing is 100%,combining ten or more security features into acheck will deter or expose most check fraudattempts.

II

EXPLICIT WARNING BANDS

PRISMATIC PRINTING


IMAGE SURVIVABLESECURE SEAL

is an encrypted barcode that is laserprinted on the face of the check. The barcodecontains all the critical information found onthe check. See Page 7.

HIGH-RESOLUTION BORDERSare intricately designed borders that are

difficult to duplicate. They are ideal for covertsecurity as the design distorts when copied.

ULTRAVIOLET LIGHT-SENSITIVE INK AND FIBERS

Ultraviolet light-sensitive ink and fibers can be seen under ultraviolet light (black light) andserve as a useful authentication tool.

HOLOGRAMSare multicolored three-dimensional

images that appear in a reflective materialwhen viewed at an angle. They are anexcellent but expensive defense againstcounterfeiting in a controlled environment.Holograms are usually not cost-effective onchecks, but are valuable in settings such asretail stores where a salesperson or attendantvisually reviews each item before acceptance.Holograms enhance admission passes, giftcertificates and identification cards.

ARTIFICIAL WATERMARKSare subdued representations of a logo or

word printed on the paper. These marks canbe viewed while holding the document at a45º angle. Customized artificial watermarksare superior to generics. Copiers andscanners capture images at 90º angles andcannot see these marks. However, to theuntrained eye, their appearance can bereplicated by using a 3% print screen.

MICROPRINTINGis printing so small that it appears as a

solid line or pattern to the naked eye. Undermagnification, a word or phrase appears. Thislevel of detail cannot be replicated by mostcopiers or desktop scanners.

DUAL IMAGE NUMBERINGcreates a red halo around the serial

number or in the MICR line of a check. Thespecial red ink also bleeds through to the backof the document so it can be verified forauthenticity. Color copiers cannot accuratelyreplicate these images back-to-back.

IMAGE SURVIVABLESECURE SEAL

DUAL IMAGENUMBERING

HIGH-RESOLUTIONBORDERS

ULTRAVIOLET LIGHT-SENSITIVE INK AND

FIBERS

ARTIFICIALWATERMARKS

HIGH SECURITY CHECKShelp deter check fraud attempts by

making the criminal’s task of altering orreplicating an original check more difficult.

They also establish the basis for anindemnity claim charge-back under Check21’s indemnity provision. See Page 6.

High-security checks should haveat least ten (10) safety features. Among the best safety features are acontrolled paper, a true watermark,thermochromatic ink, and toneranchorage on laser checks.

Frank Abagnale designed theSupercheck, the SuperBusinessCheckand SAFEChecks to help consumers,businesses and organizations have accessto high security checks at affordableprices. See Pages 10-13.

HOLOGRAMS

MICROPRINTING


AVAILABLE STYLESLASER - TOP LASER - MIDDLE LASER - BOTTOM CONTINUOUS - 1 PART

LEGAL LASER - TOPLEGAL LASER -SECOND PANEL

LEGAL LASER -PANELS 2 & 4

CONTINUOUS - 2 PART

VOUCHER - 2 PART VOUCHER - 3 PART VOUCHER - 4 PART

CONTINUOUS - 3 PART CONTINUOUS - 4 PART

SAFECHECKS

Covert Security FeaturesControlled Paper StockFluorescent Fibers – Become visible under ultraviolet light.Chemical Reactivity – to 85 chemicals.Toner Anchorage on Laser ChecksCopy Void Pantograph

Overt Security FeaturesThermochromatic Ink – The pink lock and key icons fade away when warmed above 90º and reappear at 78º. This reaction cannot be replicated on images created by a color copier.Fourdrinier (True) Watermark – The true watermark is visible from either side when the check is held toward a light source. It cannot be color copied or scanned.Explicit Warning BandsChemical Wash Detection Box – See Figure 2 on page 13.Sequenced Inventory Control NumbersMicroprintingLaid Lines

12 SAFETY FEATURES

AFEChecks weredesigned by FrankAbagnale with 12

security features, andare virtually impossible toreplicate accurately usingdesktop publishing tools or acolor copier. SAFEChecks areprinted on controlled, true-watermarked security paper. Toprevent unauthorized use,checks are never sold blankwithout first being customizedfor each specific customer.

SS SAFEChecksP.O. Box 8372Van Nuys, CA 91409-8372(800) 755-2265

NOT USING POSITIVE PAY?You should! Talk to your banker ASAP!

VisitPositivePay.net

SafePay123.com

MORE FRAUDPREVENTION

TIPS

VisitFraudTips.net

Supercheck.net


ABAGNALE SUPERBUSINESSCHECK

AVAILABLE STYLESLASER - TOP LASER - MIDDLE LASER - BOTTOM

LASER3-ON-A-SHEET LEGAL LASER - TOP

LEGAL LASER -SECOND PANEL

3-ON-A-PAGE

COVERT SECURITY FEATURESControlled Paper StockFluorescent InkFluorescent Fibers Chemical Sensitivity Toner AnchorageCopy Void PantographMicroprintingChemical Reactive Ink

OVERT SECURITY FEATURESThermochromatic InkFourdrinier (True) WatermarkHigh-Resolution BorderPrismatic PrintingExplicit Warning BandsChemical Wash Detection BoxSequenced Inventory Control NumbersLaid Lines

16 SAFETY FEATURES “After years of designing checks forFortune 500 companies and majorbanks, I designed the Supercheck, theSuperBusinessCheck and SafeChecksto help consumers, medium and smallbusinesses, and organizations protecttheir checking accounts.”

SECURE ORDERING PROCEDURESTo prevent unauthorized persons from ordering checks on your account, SAFEChecks verifies all new check orders withyour bank. We confirm that the name, address and account number on the order form match the data on file with thebank. Check orders are shipped to the address on file with the bank. Reorders with a change of address are re-con-firmed with the bank. Our Secure Ordering Procedures are in place for your protection, and we are unparalleled in thecheck printing industry.

he SuperBusinessCheck is the most secure business checkin the world. Designed by Frank Abagnale with 16 securityfeatures, the check is virtually impossible to replicate or alter

without leaving evidence. The SuperBusinessCheck is printed

on very tightly controlled, true-watermarked security paper. For yourprotection, checks are never sold blank without first being customizedfor each specific customer. Available styles are shown below. Pricingcan be found on the Web at SAFEChecks.com or Supercheck.net.TT

SuperBusinessCheckP.O. Box 8372Van Nuys, CA 91409-8372(800) 755-2265

Please send a voided original check with this completed form. We will call you to confirm receipt.To be printed on checks For file information (not printed on checks)

Shipping Instructions:

Face UpHow are your laser checks placed in the printer?

RUSH (RUSH FEE APPLIES)

Standard Turnaround (ships in 5-7 business days)

OtherHow did you hear about us? Seminar bySeminar by Frank Abagnale

Download a price list at SAFEChecks.com(800) 755-2265

Fax (800) 615-2265

Phone ( )

CUSTOMER NAME, ADDRESS AND PHONE NUMBER

BANK NAME AND ADDRESS

Ship-To Address (if different from address on checks)

Attention:

Routing / Transit:

Date you must receive checks

QuantityCheck Starting Number

Check this

box for two

signature linesText to be printed above signature lines

Custom Logo - Camera-ready art or electronic file (diskette

or e-mail) is required. Send to: [email protected]

JPG, EPS, PSD, TIFF & BMP are acceptable formats

LASER CHECKS

Version #Software NameFace Down

Prepared by (print): Phone Number: Date:

8934 Eton AvenueCanoga Park, CA 91304

Bank Representative's Phone #Bank Representative

Account Number

To be printed on checks For file information (not printed on checks)

Duplicate

Triplicate

Quadruplicate

Blue

Blue

Blue

Green

Blue BottomCheck: TopGreen

Green Red

Green

Version #Software Name

Single

THREE-ON-A-PAGE HANDWRITTEN CHECKS

Single Stub (General Check) Frank Abagnale's SuperBusinessCheck

Three-on-a-Page Binder

Top Check

Middle Check

Bottom Check

Ground UPS

Other:

Overnight UPS Two-day UPS

12/8 X 11 Frank Abagnale's SuperBusinessCheck (one color design only)

Check in 2nd Panel

Top Check

12/8 X 14 Frank Abagnale's SuperBusinessCheck (one color design only)

3 Laser Checks per Sheet

To prevent unauthorized persons from ordering checks on your account, all new check orders are verified with your bank. We confirm that the name, address and account number on the order form match the information on file with the bank. Check orders are shipped to the address on file with the bank. Reorders with a change of address are re-confirmed with the bank.

Top Check Blue Green Red Plum

Middle Check Blue Green

Bottom Check Blue Green

12/8 X 11

Check in 2nd Panel

Check in 2nd & 4th Panels

Blue Green Red

Blue Green

Blue Green

Top Check

12/8 X 14

SECURE ORDERING PROCEDURES

Duplicate

Triplicate

Quadruplicate

Blue

Blue

Blue

Green

Green Red

Green

VOUCHER CHECKS

Pressure seal checks are custom designed. Call (800) 755-2265 ext. 3306.

PRESSURE SEALCONTINUOUS CHECKS

Bank Fraction:

PLEASE PHOTOCOPY THIS FORM TO ORDER CHECKS


ABAGNALE SUPERCHECK

Controlled Paper StockFourdrinier (True) WatermarkThermochromatic InkChemical Sensitivity Explicit Warning BandsPrismatic PrintingChemical Wash Detection Box High-Resolution BorderLaid LinesFluorescent Fibers Fluorescent Ink Microprinting

12 SAFETY FEATURES

STYLES

he Supercheck is a high security personal check designedby Frank Abagnale to help consumers protect their checking

accounts. The Supercheck contains 12 security features, is

reactive to 85 chemicals, is Check 21 compatible, and is nearlyimpossible to replicate or to alter without leaving evidence. It is “the check for people with something to lose.”TT

“The check for people with something to lose”

CHECK ORDER FORM AND INFORMATION

Our Secure Ordering Procedures are unmatched in the check printing industry. For your protection, weverify that the name, account number, and mailing address match the information on file with your finan-cial institution. Checks are shipped to the address on file or directly to your financial institution. Reorderswith a change of address are re-verified with your financial institution.

We need all three (3) items below Please mail to: Delivery Times:to complete your order:

1. Completed ORDER FORM SAFEChecks Allow 3 weeks for delivery. 2. VOIDED CHECK (indicate any changes P.O. Box 8372 Expedited service is available.on the face) Van Nuys, CA 91409-8372 Call (800) 755-2265 ext 33043. VOIDED DEPOSIT SLIP

Name Primary Telephone (We do not give or sell your information to anyone.)

Email Address Alternate phone where you can be reached

Please mail checks to the:

____Address on checks (this address must be on file with the financial institution)

____Financial institution ________________________________________________________________Branch Address City State Zip

____Other __________________________________________________________________________Address must be on file with bank

Check # of TotalORDER SUMMARY Start # Boxes (price + s/h)

Wallet Supercheck Single

Wallet Supercheck Duplicate

SubTotal

California residentsadd sales tax

TOTAL

PAYMENT OPTIONS:

_____Debit this checking account _____Check or Money Order enclosed

(made payable to SAFEChecks)

_____Bill my credit card: _____MasterCard _____Visa

Credit Card Account Number / Expiration Date Security Code

Cardholder Name

Authorized Signature

Billing address of credit card if different from address on checks

Single - $29.95 per box of 150

Duplicate - $32.95 per box of 125

Shipping/Handling - $2.00 per box

PLEASE PHOTOCOPY THIS FORM TO ORDER CHECKS


HOLDER IN DUE COURSEHolder in Due Course (HIDC) is part of the Uniform Commercial

Code (UCC) that significantly impacts an organization’s liability for checkfraud and the checks it issues. After learning about HIDC, prudentcompanies are often motivated to use high security checks and changecheck disbursement procedures to protect themselves. Anyoneresponsible for check disbursements or fraud prevention shouldunderstand this law. Following is a brief description of Holder in DueCourse, and three Federal Appellate Court rulings.

In simple terms, a Holder in Due Course is anyone who accepts acheck for payment. On the face of the check there is no evidence of

forgery or alteration, nor does the recipient have knowledge of any fraudrelated to the check. Under these conditions, the recipient is an HIDCand is entitled to be paid for the check. The statute of limitations underthe UCC for an HIDC to sue the check’s maker for its face value is 10years from the issue date, or three years from the date the check wasfirst deposited and returned unpaid, whichever comes first. An HIDC canassign, sell, give, or otherwise transfer its rights to another party, whoassumes the same legal rights as the original Holder.

The following three Federal Appellate Court cases illustrate the far-reaching power of Holder in Due Course.

ROBERT J. TRIFFIN V. CIGNA INSURANCEIssue: Placing A Stop Payment Does Not Eliminate Your Obligation To Pay A Check

In July 1993, Cigna Insurance issued James Mills a Worker’sCompensation check for $484. Mills falsely claimed he did not receive itdue to an address change, and requested a replacement. Cigna placeda stop payment on the initial check and issued a new check. Millsnevertheless cashed the first check at Sun’s Market (Sun). Sun thenpresented the check for payment through its bank.

Cigna’s bank dishonored the check, stamped it “Stop Payment,” andreturned the check to Sun’s bank. Had Sun filed an HIDC claim againstCigna as the issuer of the check, Sun would have been entitled to bepaid because of its status as a Holder in Due Course. Apparently Suneither did not know about HIDC or chose not to pursue it, because theymerely pinned the check on a bulletin board in the store, for two years.

Robert Triffin bought the check from Sun, assumed its HIDC rights,

and filed this lawsuit in August 1995, over two years after the check wasreturned unpaid (statute of limitations is three years). The Court ruled infavor of Robert Triffin, and ordered Cigna to pay him $484, plus interest.

Recommendation: Cause a check to “expire” before replacing it,or you may be held liable for both checks. Print an expiration statementon the check face such as, “THIS CHECK EXPIRES AND IS VOID 20 DAYSFROM ISSUE DATE.” If a check is lost, wait 20 + 2 days from the initialissue date before reissuing. Many companies print “VOID AFTER 90DAYS” but cannot reasonably wait that long before re-issuing a check. Aparty that accepts an expired check has no legal basis to sue as an HIDCif the check is returned unpaid.

Superior Court of New Jersey, Appellate Division, A-163-00T5lawlibrary.rutgers.edu/courts/appellate/a0163-00.opn.html

ROBERT J. TRIFFIN V. SOMERSET VALLEY BANK AND HAUSER CONTRACTING CO.Issue: You May Be Held Responsible For Checks You Did Not Issue or Authorize

Hauser Contracting Co. used ADP for payroll services. A thiefobtained check stock that looked identical to ADP’s checks and created80 counterfeit payroll checks totaling nearly $25,000 that were identicalto Hauser Contracting Co.’s.

A retailer who knew Mr. Hauser became suspicious and called him.Somerset Valley Bank also called. Mr. Hauser reviewed the in-clearingchecks, which looked just like his, and confirmed the checks wereunauthorized and the payees were not his employees. The bankreturned the checks marked as “Stolen Check - Do Not Present Again.”

Mr. Triffin bought 18 of these checks totalling $8800 from fourcheck cashing agencies, claimed HIDC status, and sued both Mr. Hauserand his bank for negligence for not safeguarding the payroll checks and

facsimile stamp. Because the counterfeit and authentic checks lookedidentical, the lower court ruled for Triffin. Hauser appealed, but theFederal Appellate Court upheld the lower court. The Court said thecounterfeit check met the definition of a negotiable instrument, andbecause the check and signature were identical to an authentic check,the check cashing agency could not have known it was not authentic.

Recommendation: Use a controlled check stock, which meansusing checks that are uniquely designed or customized for yourorganization and are not available blank to others. SAFEChecks and theSuperBusinessCheck are controlled check stocks.

Superior Court of New Jersey, Appellate Division, A-163-00T5lawlibrary.rutgers.edu/courts/appellate/a0163-00.opn.html

ROBERT J. TRIFFIN V. POMERANTZ STAFFING SERVICES, LLCIssue: High Security Checks May Protect You From Some Holder in Due Course Claims

Pomerantz Staffing Services used high security checks thatincluded heat sensitive (thermochromatic) ink on the back and a warningbanner on the face that said, “THE BACK OF THIS CHECK HAS HEATSENSITIVE INK TO CONFIRM AUTHENTICITY.” Someone made copies of

Pomerantz’s checks, but without the thermo ink on the back. Theycashed 18 checks totaling $7000 at Friendly Check Cashing Company.Friendly’s cashiers failed to heed the warning on the check face, and didnot look for the thermo ink on the back. All 18 checks were returned

COURT CASES


FACSIMILE SIGNATURES MAY INVITE FRAUD LOSSESArkwright Mutual Ins. Co. v. NationsBank, N.A. (South)

Original Case No. 96-2969-CIV-GOLD; (SD Fla. 1999)Appeal Case 2000 WL 679165,41; Rep.2d 726 (11th Circuit 2000)

In another victory for banks, the Florida 11th Circuit Court of Appealsupheld NationsBank’s (now Bank of America) interpretation of its carefullyworded Deposit Agreement. This agreement effectively shifted the burdenof responsibility from the bank to its customer in cases of forgery. Thephrase “purporting to bear the facsimile signature” saved NationsBankover $4 million in losses resulting from forged checks.

Florida Power and Light (FPL), a customer of NationsBank, used afacsimile machine to sign most of its corporate checks, nearly 20,000each month. Unfortunately, 27 fake checks were cashed over a two-month period in 1993, totaling $4,387,057. They bore exact replicas ofthe facsimile signature and used actual serial numbers from real FPLchecks that had been voided or cancelled.

Because all of the counterfeit checks were over the $25,000 SightReview threshold established by NationsBank, each one was sent to the“signature control department” and visually compared with the authorizedsignatures. The fake checks appeared authentic and signatures wereidentical to the signature card, and therefore were paid “in good faith.”

When FPL discovered the counterfeits, they contactedNationsBank, which in turn contacted its upstreamcollecting banks. However, because the 24-hourrescission period had long since passed,NationsBank was denied its request forreimbursement. It therefore refused to credit FPLfor the loss.

Arkwright Mutual Insurance, who insured FPLagainst commercial crime, reimbursed thecompany. It then sued NationsBank. Arkwrightclaimed that the checks were not “properly payable”because nothing in the contracts between the two hadauthorized NationsBank to pay checks with forgedfacsimile signatures.

NationsBank disputed this, pointing out that FPL had agreed to aprovision in its Deposit Agreement that said, “If your items are signed usingany facsimile signature or non-manual form of signature, you acknowledgethat it is solely for your benefit and convenience. You accept soleresponsibility for maintaining security over any device affixing the signature.Such signature will be effective as your signature regardless of whether theperson affixing it was authorized to do so.”

As part of the Deposit Agreement contract, FPL had passed aresolution authorizing NationsBank to pay checks for $500,000 or less

“when bearing or purporting to bear” selected facsimile signatures.This is extremely significant. Banks are bound by the regulations of

the Uniform Commercial Code (UCC), which has historically placed theresponsibility for detecting forgery on the bank. However, the UCC alsospecifically allows a bank and its customers to alter, through contractualagreement, the liability for fraud losses.

“The effect of the provisions of this chapter (4-103) may be variedby agreement, but the parties cannot disclaim a bank’s responsibility forits lack of good faith or failure to exercise ordinary care or limit themeasure of damages for the lack of failure. However, the parties maydetermine by agreement the standards by which the bank’s responsibilityis to be measured, if those standards are not manifestly unreasonable.”

In other words, the parties may set their own ground rules as long asit is not overly one-sided.

The Official Comments to Chapter 4-103 expand on this idea:“…In view of the technical complexity in the field of bank

collections, the enormous number of items handled by banks, thecertainty that there will be variations from the normal in each day’s

work in each bank, the certainty of changing conditions andthe possibility of developing improved methods of collectionto speed the process, it would be unwise to freeze the

present methods of operation by mandatory rules.This section, therefore, permits within wide limitsvariation of the effects of provisions of this Article byagreement…[Subsection [1]] confers blanket

power to vary all provisions of this Article byagreements of the ordinary kind.”

The Florida court granted summaryjudgment to NationsBank, agreeing that these twocontractual agreements shifted the liability for theforged checks to Florida Power and Light.

Clearly, the courts are upholding the freedom-of-contract languagebetween a bank and its customers, requiring a company to abide by theagreements it has signed. These legal precedents should encouragebanks to be precise when drafting documents outlining customerresponsibilities with respect to fraud, and customers to read, fullyunderstand, and agree to “the fine print.”

Conclusion: Implement fraud prevention measures such as PositivePay and highly secure controlled check stock, which would have caughtthe forged checks and stymied the forger.

unpaid, likely caught by Positive Pay.Mr. Triffin bought the checks, claimed Holder in Due Course status,

and sued Pomerantz. Pomerantz counter-sued and won! The judgecorrectly asserted that if Friendly had looked for the thermo ink asinstructed, they could have determined the checks were counterfeit.Because they were provided a means to verify authenticity and failed todo so, they were not an HIDC and had no rights to transfer to Mr. Triffin.

This case illustrates the value of check security features, a properlyworded warning band, and a controlled check stock. Pomerantz wasprotected by his checks.

Recommendation: Use high security checks with overt and covertsecurity features, including explicitly worded warning bands. Suchsecurity features will also help prevent other kinds of check fraud. TheSuperBusinessCheck is a properly designed high security check with16 security features.

http://lawlibrary.rutgers.edu/courts/appellate/a2002-02.opn.html

Visit www.fraudtips.net for an in-depth article, Holder inDue Course and Check Fraud, written by Frank Abagnale andGreg Litster. Click on Holder in Due Course.


CYBER CRIME PROTECTIONRecently, a Midwestern company’s computer

system became infected with a virus that trackedkeystrokes. The hacker was able to decipher thelog-on keystrokes to the company’s bank, loggedon, and sent $160,000 in ACH credits to variousbank accounts. The money was sent overseas.The company was shocked when its bank deniedliability for the loss because the log-on wasauthentic. A bank is not responsible for theintegrity of a customer’s computer.

External Threats: Guard against hackers byusing a firewall device, and anti-spyware andanti-virus software. When evaluating products,read the reviews in PC Magazine (pcmag.com)and CNET Networks (cnet.com). Read bothbecause they critique differently. Small companies might consider the Cisco Pix® 501($250 new or $100 on Ebay) or Barracuda firewalls, and Webroot.com anti-spyware forhome or office. For virus protection, Norton andMcAfee are highly rated programs, but can slowdown an older computer. Look at Kaspersky,which is highly rated but is not a resource hog.Update for new threats weekly.

Internal Threats: According to the Associationof Certified Fraud Examiners, over 85% of intellectual property theft is committed by insiders. Know your employees. Do backgroundchecks on IT, finance, mailroom and temporaryemployees, and the cleaning crew.Facebook.com, MySpace.com, Zabasearch.comand Zoominfo.com are great on-line resources forpersonal information. Other ideas:

• Put into writing an Internet usage policy, andmonitor employees. Legally, employees mustbe told their computer activities are monitored.

• Disable an employee’s remote access to thecomputer system during vacation so internalscams cannot be perpetuated.

• Disable a terminated employee’s computeraccess and voice mail immediately.

• Sanitize internal data. Delete the middleeight digits of any SSNs in the system.

• Allow customer and company data to beviewed but not copied.

• Configure the computer system activity logto capture all transactions, including thoseallowed by permission, not just failed log-onattempts.

• Change the firewall and all system passwords from the factory defaults.

• Seal over plug-in slots for thumb drives toprevent data from being copied and taken.

• “Free” wireless access sites, e.g. airports orlibraries, often have overlapping wirelesssites set up nearby. These free sites canhave “sniffers” looking for passwords.

The Abagnale Supercheck, America’s firsthigh security check made for individuals,and the uni-ball® 207TM are perfectcompanions to fight check fraud. TheSupercheck is reactive to 85 differentchemicals, and the uni-ball® 207TM’s gelink is virtually impossible to dissolve bychemicals. Together they thwart checkwashing, one of the most common methodsused by criminals to alter checks. See Page13 and visit

supercheck.net

uni-ball® 207™ Gel Pen

The uni-ball® 207™ pen uses specially formulated gel inks with color pigments that are nearly impossibleto chemically “wash.” It retails for under $2, is retractable and refillable, and images perfectly. It can befound at most office supply stores.

Do you reconcile your bank accounts on atimely basis? A Wisconsin man learned too latethat his bank had shortened the timeframe to reportunauthorized items, and it cost him $130,000.

UCC 4-406 requires an account holder toexercise “reasonable promptness” in examiningmonthly statements and reporting unauthorizedsignatures or alterations. Under the revised UCC,now adopted by all states except New York andSouth Carolina, “reasonable promptness” isconsidered 30 days. Subsection (f) sets a one-yearoutside limit for reporting discrepancies or errors“without regard to care or lack of care of either thecustomer or the bank.”

UCC 4-103 allows for contractualamendments of the UCC rules, provided the bankdoes not try to disclaim its own negligence. Manybanks throughout the country have shortened theone-year timeframe for reporting discrepancies, andin light of the following Wisconsin case, many moreare likely to do so.

In Borowski v. Firstar Bank Milwaukee, theaccount holder, Borowski, maintained two checkingaccounts with Firstar Bank (now US Bank)—hispersonal account and an account for his father’sestate. Borowski alleged that his fiancè stole$100,000 from the estate account and $50,000from his personal account, using forged checks,unauthorized telephone transfers, and forgedhandwritten notes requesting cashier’s checks thatwere left in the bank’s night depository box. Whenthe monthly statements and $20,000 in cashier’schecks were sent to Borowski, his fiancèintercepted them. When Borowski discovered hisloss of both money and faith, he sued the bank toget his money back. (We presume he also called

off the marriage, thus mitigating future financialoutlays for wedding expenses, divorce attorney fees,and alimony.)

In court, the bank moved for summaryjudgment based on the signature card agreementson the two accounts. The personal accountagreement required that the bank be notified “. . .of any unauthorized or altered item shown on yourstatement within fourteen (14) days of thestatement date.” The estate account requirednotification “. . . of an unauthorized signature oralteration on an item within 14 days after we sendor make available to you your statement and itemsor copies of the items.” The bank argued that thesetwo specific provisions completely barredBorowski’s claims. For his part, Borowskiacknowledged that he had not reviewed thestatements because his fiancè intercepted themand then lied to cover their receipt. But he arguedthat the bank was negligent in the handling of hisaccounts.

The court ruled in favor of the bank. It foundthat Borowski’s failure to reconcile on a timely basisbecause of the deception of his betrothed wasirrelevant as long as the bank had mailed them tothe customer’s proper address. The burden ofreceipt falls upon the customer. The issue of allegedbank negligence was deemed irrelevant because theshortened timeframe to report errors was anallowable contractual variation of the one-year rule,which the bank had made part of the signature cardagreement. The court did rule in favor of Borowskiregarding the $20,000 in cashier’s checks that wereissued on the basis of fraudulent hand-written notes,because the bank failed to make those notesavailable with the bank statement.

TIMELY ACCOUNT RECONCILIATION ISESSENTIAL

Borowski v. Firstar Bank Milwaukee, NA579NM2d 247, 35 UCC Rep.2d 221 (Wis. Ct. App. 1998)

The Abagnale Supercheck“The check for people with something to lose”


or the past 25 years, theaccounting firm KPMG

International has surveyed thetop 1000 firms in the United

States, asking them to rank the crimesthat hurt their company the most. KPMG doesnot ask how many dollars were lost, only theranking of the types of crime.

Since the survey began, embezzlementhas ranked Number 1 among these firms.Check fraud did not make the list until 10years ago, when it ranked ninth. Today, checkfraud ranks Number 2.

Under the revised Uniform CommercialCode (UCC), employers have sole responsibilityfor the actions of their employees. Employersare in a far better position to avoid losses bycarefully selecting and supervising theiremployees, and by adopting other internalfraud prevention measures. By strictlyfollowing basic internal financial controls,companies can prevent or substantially reducetheir risk of embezzlement.

HIRING PRACTICESUse hiring procedures that keep people

with questionable backgrounds out of yourorganization. Check all references. Confirmemployment dates and look for time gaps in arésumé. When filling positions in sensitiveareas, conduct complete background checks.Use bonded temporaries in financial functions.

Establish internal controls to prevent thetheft of incoming or outgoing checks. Manycrime victims have traced the theft to their ownmail rooms! Mail room personnel must haveclean backgrounds. Bonding makes sense.

ACCOUNTS PAYABLE ANDPAYROLL CONTROLS

The payroll and accounts payablefunctions are particularly vulnerable to

embezzlement, and controls over thosefunctions are needed to prevent payments toghost employees or vendors. Corporations aretotally responsible for any unauthorizedpayments made by a dishonest employee.

Prevent ghost employees and improperlyaltered pay rates by restricting access to thepersonnel master file records. Adding newemployees or changing pay rates shouldrequire supervisory approval and supportingdocumentation.

To help identify and reduce exposure tofraud in the accounts payables area, engagean accounts payable audit firm with theexperience to properly audit this area. Thebetter firms provide a detailed review of acompany’s disbursement procedures as partof their audit, which is generally conductedon a no-fee contingency basis.

VENDOR MASTER FILE

Access to the master vendor file shouldbe tightly restricted. Changing vendor

records or adding new vendors should requiresupervisory approval and supportingdocumentation. Someone independent of thebuying and payment processing functionsshould review all new supplier entries. Thereview should always include a telephone callto the new supplier using a phone numberobtained from an external directory sourcesuch as 411. Verify the name, address, andFederal tax ID number.

Payroll controls should ensure that onlylegitimate employees can be added to thesystem and that the rate of pay cannot bechanged without supervisor approval andsupporting documentation.

VENDOR PAYMENTS

Checks should always be mailed directlyto the vendor or payee, and not returned to therequesting operating unit, department, division,or branch office. Returning checks to therequester is open invitation for fraud becauseof the risk of alteration.

Mailed checks returned by the Post Officeas undeliverable should not be returned to theperson who processed them. Someoneindependent from the disbursement processshould handle these exceptions and

investigate the reason for their return. Aseparate post office box should be establishedfor returned checks. Replace your companyname and address on disbursement envelopeswith a simple post office box number.

AUDITSConduct periodic surprise audits of the

various check control functions. Audits shouldtest the overall system to ensure that it issecure and functioning as it should.Independent, experienced individuals trained insoftware systems and theft detection shouldconduct these audits.

Create audit trails by restricting access tothe master file records. Most computersystems can create an audit trail of allchanges made to the master file records,including who made them and who approvedthem. Someone independent should regularlyprint and review a report detailing thechanges. This report is sometimes referred toas an “access matrix.” The access matrixshould list each person with system accessand the person’s level of access by module.Comparing the access authority of eachemployee should be part of this review.Determine a standard “access profile” for eachemployee position and restrict the master filerecords to these persons. Immediately deletethe names of employees who are terminatedor have their positions modified, andinvestigate any suspicious activity.

SEPARATE FINANCIALRESPONSIBILITIES

Make sure separate groups of people areresponsible for the accounts payable, accountsreceivable, and banking functions. Dividefinancial responsibilities to ensure that thepeople adding new vendors to the mastervendor file are not approving vendor invoicesfor payment. The people issuing checksshould not reconcile the account. If duties arenot separated, a dishonest employee couldissue a check to him or herself or to a co-conspirator, remove the check from the bankstatement, and adjust accounting records tohide the embezzlement. Receipts anddeposits must balance each day, and separatepeople should perform these duties to preventforged endorsements on stolen checks.

“If you make it easy for people to steal from you, they will.”- Frank W. Abagnale

PREVENTING EMBEZZLEMENT

FF

Checks offered by Swere designed by Frank Abagnale. As a former master forger, Mr. Abagnale’s experience designing checks is unsurpassed. The story of Frank Abagnale and the

origin of SAFEChecks follows.

SAFEChecks began in 1994 as a division of a California business bank. In the early 1990s, thebank experienced an enormous number of fraudulent checks paying against its customers’accounts. Over a three-year period, the bank saw altered and counterfeit checks increase from

$90,000 to over $3,000,000. Many of these checks were perfect replications of authentic checks.

Greg Litster, then Senior Vice President and head of the bank’s Financial Services Division, summonedthe bank’s primary check vendors and made a simple request: “Provide our business customers with checks

that forgers cannot replicate or alter.” These vendors included some of the largest check printers in the nation, yet none of themoffered a high-security check.

With fraud losses mounting, Mr. Litster hired Frank Abagnale to assist the bank in its fight against forgers. Mr. Abagnale helped thebank strengthen its internal controls, and in 1994, at the bank’s request, designed a new, high security business check. That checkbecame SAFEChecks. Over the next three years the bank caused its corporate customers to use SAFEChecks, and fraud attemptsand losses began to drop immediately. By the end of 1996, check fraud attempts fell to $120,000, a 95 percent decrease from 1993levels. Mr. Litster acquired the SAFEChecks operation from the bank in 1997, and is its president.

SAFEChecks offers high-security checks, including the Supercheck, the SuperBusinessCheck, and SAFEChecks business checks.SAFEChecks also offers Positive Pay file transmission software (see SafePay123.com), and MICR laser check printing systemswith a Secure Name and Number font to help prevent altered payee names and dollar amounts.

Frank W. AbagnaleFrank W. Abagnale is one of the world’s most respected authorities on the subjects of forgery,embezzlement and secure documents. For over 30 years he has lectured to and consulted with hundreds of financial institutions, corporations and government agencies around the world.

Mr. Abagnale has been associated with the Federal Bureau of Investigation for over 30 years.He lectures extensively at the FBI Academy and for the field offices of the FBI. More than14,000 financial institutions, corporations and law enforcement agencies use his fraud prevention materials. In 1998, he was selected as a distinguished member of “Pinnacle 400” byCNN Financial News. He is also the author and subject of Catch Me If You Can, a StevenSpielberg movie that starred Tom Hanks and Leonardo DiCaprio.

Mr. Abagnale believes that the punishment for fraud and the recovery of stolen fundsare so rare, prevention is the only viable course of action.

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SAmerica’s Premier Check Fraud Specialists

This brochure is provided for informational purposes only. SAFEChecks and the author, Frank W. Abagnale, assume no responsibility or liability for the specific applicability of the information provided. If you have legal questions regarding the enclosed material, please consult an attorney.Mr. Abagnale has no financial interest in SAFEChecks.

SAmerica’s Premier Check Fraud Specialists

(800) 755-2265safechecks.com

8934 Eton AvenueCanoga Park, CA 91304

(800) 755-2265Fax (800) 615-2265

[email protected]

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