A recent post by Fraud Avengers caught our eye related to Cashier’s Checks. It’s interesting that this long time, reliable check source had become a target in many banks for counterfeiters.
Fraudulent Cashier’s Checks typically become a deposit fraud loss at the bank of first deposit (BOFD) when the paying bank has strong controls in place for their incoming cashier’s checks. In order to best catch counterfeit Cashier’s Checks, a financial institution should implement strong image analysis and data analytics which can weed out items that have different check stock layouts as well as items with serial numbers out of range.
When using simple data analytics/fraud filters at the paying bank, Cashier’s Check review can become very monotonous because virtually all high dollar Cashier’s Checks should be “eyeballed” as it is difficult to identify patterns of fraud which might tip off the system. Even very skilled counterfeits can be detected with check stock validation because criminals many times fail to duplicate serial number formats on these items. Unfortunately, paying banks still “take the hit” due to limited capabilities in this area.
From the consumer’s standpoint, Fraud Avengers recommend:
- If you are given a Cashier’s Check, call the bank the check is drawn on to confirm that the check “has been issued”.
- Do not use the funds for at least 5-10 business days after you have deposited it. Even if your bank makes the “funds available” to you, wait several days before using the money.
- Call the bank of the Cashier’s Check to determine if it has “cleared” (or “been paid”). Keep a copy of the check and call the bank that it’s drawn on two days after the deposit has been made at your bank.