Check Fraud Protection

[Adverse]

Does anyone know if there is a Banking Law, or some other source of protection, if someone steals your checks and starts cashing them, provided, of course, you notify your bank as soon as you discover it, say at the receipt of your next statement.

Just wondering because someone has done it to my 84-year-old mentally deficient mother. I discoverd it when I set her account up on my home computer so I could monitor the account--yesterday. $12000 gone. I'm trying to deal with how to tell her.

I've reported to the bank and to the police in her town. It is an ongoing thing. Checks still coming in, but the money's about gone.

Same thing happened to my Dad (seaparated from Mom) and he passed away a year ago yesterday, after learning about it (starved himself to death).


TIA

 

[Michael Wechsler]

Originally posted by JLB:
Does anyone know if there is a Banking Law, or some other source of protection, if someone steals your checks and starts cashing them, provided, of course, you notify your bank as soon as you discover it, say at the receipt of your next statement.

Just wondering because someone has done it to my 84-year-old mentally deficient mother. I discoverd it when I set her account up on my home computer so I could monitor the account--yesterday. $12000 gone. I'm trying to deal with how to tell her.

I've reported to the bank and to the police in her town. It is an ongoing thing. Checks still coming in, but the money's about gone.

Same thing happened to my Dad (seaparated from Mom) and he passed away a year ago yesterday, after learning about it (starved himself to death).

I'm very sorry to hear about your losses and hard times.

What kind of fraud was it? Fraud in the inducement is when you fraudulently induce a person to sign something (e.g. checks) while thinking it is something else. If so, then it would seem that the bank is not responsible because the signature on the check (e.g. your Mom thought she was signing something else) was your Mom's.

However, fraud in the execution could be forgery. Was the signature very different than your Mom's?

 

[Adverse]

Re: Re: Check Fraud Protection

Originally posted by michael:
I'm very sorry to hear about your losses and hard times.

What kind of fraud was it? Fraud in the inducement is when you fraudulently induce a person to sign something (e.g. checks) while thinking it is something else. If so, then it would seem that the bank is not responsible because the signature on the check (e.g. your Mom thought she was signing something else) was your Mom's.

However, fraud in the execution could be forgery. Was the signature very different than your Mom's?

I was ahead of you on this in that I sense the bank will try to claim they had no reason to suspect the checks when they were presented so they are not culpable. That's what they did in my Dad's case.

In my Mom's case a person in her neighborhood stole her blank checks and forged them to several other people's names, who then "teller-presented" them for cash. He did similar stuff to another family down the street.

Some of them, however, do look a lot like Mom's writing, so they may have lifted some partially completed checks and then put their names in as payee.

 

[Michael Wechsler]

There is a common law rule (typically dealt with per state) dealing with someone who is a "holder in due course" or one who acquires an instrument for value (a) in good faith; (b) without notice that it is overdue/dishonored that the maker/drawer or a prior indorser has a claim to or a defense against paying it; and (c) without any reason to question its authenticity. If the bank acquired an instrument they have a claim subject to the following defenses:

1. Forgery of a maker's or drawer's signature.
2. Fraud in the execution (person does not know he is signing the instrument and thinks it is another.)
3. Fraudulent alteration (forgery)
4. Discharge in bankruptcy or other insolvency proceeding.
5. Minority, to the same extent that minority is a defense to a contract under the laws of the State involved.
6. Illegality, incapacity, or duress, to the same extent that these defenses would make a contract void under the laws of the State involved.

I can see a number of defenses where your parents could choose such defenses. However, one's negligence may preclude the ability to use these defenses.

 

[Adverse]

Thanks.

I already got my mother's money back. Unfortunately, she passed away shortly thereafter.

The only problem now is that US Bank refused to put the refunded money into the new account that was set up, with me as joint owner, and put into the closed account. Of course, that is important in the execution of the estate.

I am now also working with the SEC/NASD attorney in my Dad's case, and this may apply, since no one from the bank or brokerage made an attempt to have him execute affidvavits of non-authorization. In that case the broker forged checks of both the brokerage's bank and dad's personal bank and the broker was in a position to keep dad from finding out.

The broker has pleaded guilty and is assisting the case against the brokergae as part of his probation requirement.

Strangely, in the same state, mom's petty criminals faced 25 years for forging $12,000 and dad's white-collared criminal only faced 10 years and got probation for around $300,000 in loss.

No one said the legal system is perfect. ;-}

 

[Michael Wechsler]

Excellent news! The least of your problems should be that money is deposited into the wrong account of your family! Yes, it is strange and disturbing that the penalties for harsh white collar crimes can be less than rather petty theft, an inconsistency that is attempted to be dealt with on a regular basis by the unfortunate souls that get punished so very severely for crimes that are much less harmful than others... but at least there is punishment. Good luck to you!

Originally posted by JLB
Thanks.

I already got my mother's money back. Unfortunately, she passed away shortly thereafter.

The only problem now is that US Bank refused to put the refunded money into the new account that was set up, with me as joint owner, and put into the closed account. Of course, that is important in the execution of the estate.

I am now also working with the SEC/NASD attorney in my Dad's case, and this may apply, since no one from the bank or brokerage made an attempt to have him execute affidvavits of non-authorization. In that case the broker forged checks of both the brokerage's bank and dad's personal bank and the broker was in a position to keep dad from finding out.

The broker has pleaded guilty and is assisting the case against the brokergae as part of his probation requirement.

Strangely, in the same state, mom's petty criminals faced 25 years for forging $12,000 and dad's white-collared criminal only faced 10 years and got probation for around $300,000 in loss.

No one said the legal system is perfect. ;-}