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Association Financial Management

"Protecting Yourself Against Check Fraud - Revisited"
By Suzanne C. Pine, Executive Vice President

In 1997 I had the opportunity to attend a seminar offered by our commercial bank entitled "Catch Me If You Can." The presenter was Frank Abagnale, one of the world's most respected authorities on the subject of check fraud 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, including the FBI Academy and FBI field offices. He is the author and subject of the book Catch Me If You Can, which was made into a movie by Steven Spielberg starring Tom Hanks and Leonardo DiCaprio.

Prior to his current illustrious career, Mr. Abagnale made a living as one of the world's most notorious "professional check writers," having cashed over $2.5 million in phony checks in every state and 26 countries over a five year period. He was eventually caught and punished and released on the condition that he would give up his life of crime and work with the government in fighting financial fraud.

Statistics from 1995 estimated an annual loss of $10 billion from check fraud. That estimate has doubled in just twelve years. The American Bankers Association has stated that check fraud is growing at a rate of 25 percent per year. If that wasn't bad enough, recent changes in the Uniform Commercial Code now allows banks to share the loss with the depositor, making businesses and individuals vulnerable.

An informed and aware consumer is still the best protection against check fraud. The majority of the prevention tips offered during that 1997 seminar are still valid today and include:

  • Examine bank statements promptly
  • Report losses promptly
  • Store paper checks in a safe and secure manner
  • Segment check responsibilities among staff members
  • Conduct periodic audits
  • Subscribe to an electronic check monitoring program through your bank