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Check Fraud Alert; Beware of Those Carrying a Smartphone

Real Estate Agent with Sand Castle Realty

So, you're in business.  You issue a check as payment to a client or 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.  This burns my biscuits, as they say in the South, that we have to beware of yet another "Who thinks of these things?!! scam. 

I just heard of this type of fraud today via an alert from my local Realtor Association of Greater Fort Myers and The Beach.  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.  You might then be asked to wire the proceeds instead.

I hope this alert can help those in the Real Estate Industry to not fall victim to this newest form of dishonesty. 


Jimmy Katz
Wynd Realty & Katz Realty Group - Alpharetta, GA
"REAL Solutions for Real Estate!"

wow!  so glad that i read your post!  i knew that this 'convenience' was available, but had no idea how it could effect people

Aug 26, 2011 08:31 AM
Bud & Beth McKinney
Cary/Raleigh/Apex NC - The Team That Cares, RE/MAX United

Well dang, where DO they think up these things? Technology is evolving for the better, but at times it seems to be doing more harm then good! I mean, I am a fan of sending the picture so that I do not have to get in my car and drive out to our bank. I just wish that these new developments could, for once, come without back lash.

Aug 26, 2011 08:36 AM
Dana Carrera
Sand Castle Realty - Bonita Springs, FL

The app was an innovative idea; but it's good to warn the naive or uninformed how it could be used.  Sigh. 

Aug 26, 2011 08:51 AM
Kathy Nielsen
http://atlantahomestaging.net - Marietta, GA
Atlanta Georgia Home Stager

Wow. While I've heard of the technology and loved the thought of how convenient that would be, I hadn't thought it all the way through. Thanks for sharing this.

If I pay by check, and then am asked to pay by another means, I'll be sure to check my bank account first to see if the check has cleared AND place a stop payment on that check.

Again, thanks for sharing this troubling concern. It's good information to have.


Aug 27, 2011 12:09 AM