So, you're in business. You issue a check as payment to a client or a vendor. Very soon, they change their mind and tell you, that's okay, here is your check back, just wire the funds or pay cash. You have the check back in your hands and being the nice guy that you are, you go ahead and comply with their wishes. SCAM! Or it could be.
With some of the latest and greatest apps for iphones and other Smart phones, a person can take a photo of the front and the back of that check and deposit it into their bank account without ever setting foot in a bank. Then, the scam artists collect twice by returning the check to you and having another method of payment made to them.
I just heard of this type of fraud today via an alert from my local Realtor Association of Miami Board, and, I quote: "The Florida Land Title Association recently reported an incident to its members where a title agent fell victim to a fraud scheme involving a Smart phone and a new app that allows a check to be deposited by using the Smart phone's camera to take a picture of the front and back of the check.
A couple was issued a check for closing proceeds. They then left the agent's office but returned several hours later and asked the agent to wire the proceeds instead. The agent took the check back, voided it (rather than stopping payment on it) and wired the proceeds to the couple's account. The agent did not realize that the couple had already deposited the check using a Smart phone, causing a shortage in the trust account."
The article goes on to tell us that we should protect our checks as if they were cash, while they are still in our possession and to refuse to exchange them for other forms of payment after they have left your office.
Sometimes the villains do not even have to leave a closing, with the check. If signed checks are within their reach or camera shot during the closing, this could allow them to take the photos of the front and back of the check, and "deposit" it. This can be a major problem in the event the transaction falls through during the closing, or if you are asked to wire the proceeds instead, and didn’t know about this scam.
I hope this alert can help those in all industries, that deal with checks and vendors, to not fall victim to this newest form of dishonesty.