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Everyone thinks they know something about check fraud but few business people know how vulnerable they are to this growing problem.

Here’s a horror story that will get your attention. It occured south of the Mason Dixon line to a industrial supplier who thought he had tight control on his financial reins. He watched checks come in and signed checks that went out and made sure that he was paying amounts that he had contracted for. His bookkeeper was a mature woman whom he trusted. He did not know she was deeply in debt and had a troubled personal life. She was on time, neat, answered the phone promptly, never took a sick day - a seemingly perfect employee in every regard. And then one day she didn’t show up and he began fielding calls from vendors asking when to expect their checks. He got another call from his banker saying he was close to being overdrawn.

And here is what he and the police discovered. His bookkeeper had for two months been endorsing the checks from his customers made out to his business and endorsing the checks to his vendors he had signed and had mailed them all with her credit card statement to her credit card company. Her credit card company questioned nothing and credited them all to her account which then showed a huge credit balance. When the calls from vendors reached a peak she took off on a Caribbean vacation for which she paid by credit card. When they caught up with her there was no money left and, in fact, her credit card company lost on the additional charges she had made after the credit balance was used up. It was her first offence and she received a slap on the wrist.

The industrial supplier lost everything.

So, what’s the lesson? Well, obviously the boss was out of touch with the money end of his business. His focus was sales. There were several things he could have done but one of the most important would have been to have all of his bank statements go to his home instead of his business. A glance at his bank statement would have alerted him that something was wrong. In fact, had that proceedure been in place, his bookkeeper probably would never have tried her scam. His second error was not keeping in touch personally with his major vendors. He was allowing too much slack in relationships critically important to his business.

But his biggest error was not doing business with www.CheckChecks.com who had sent out a newsletter several years before warning business people of this very problem and had drawn attention to it several times since in subsequent newsletters. Www.CheckChecks.com has also had several newsletter articles about new check security features and their deterrence in other types of business check fraud. Call them toll free at 1-888-771-4831 if you have check security issues or questions about check fraud.