Heed these four words: Read your monthly statement.
Whether it's a Visa bill or your bank statement, it pays to comb those fine lines. If you don't, you could get tangled up in phony fees or charges.
Case in point: Our two readers in this week's column – a widow in her eighties with confusing credit card fees and a working professional who was the victim of check fraud.
Q: Someone stole my checking account information and forged a series of fake checks, using my account and bank routing numbers. They racked up about $1,200 on checks written to grocery stores, hardware stores, Macy's, etc.
The bank's check-cashing system never caught the phony checks or flagged my account. I didn't notice it for months – until I was looking through my statements for tax deductions.
I took this all the way up to the bank vice president's office but discovered I'm responsible for informing the bank of any potential fraud within 30 to 60 days. Otherwise, the bank has no obligation to pursue the fraud or make good on my losses.
Basically, it's money down the drain. Obviously, I should have been watching my bank account more carefully, but I know I'm not the only person who's been victimized like this. Can you inform your readers how easy it is and how little recourse they have?
– David S., Fair Oaks
A: Your experience is increasingly common, according to state and federal banking officials, who say check fraud is booming – in many forms.
There's even a Web site, www.fakechecks.org, sponsored by the National Consumers League, that details all the popular check-cashing schemes trapping unsuspecting consumers.
Some of those involve sending consumers a check – for lottery winnings or an Internet auction – then getting them to send money elsewhere in exchange. In cases like yours, someone steals your personal financial information and goes on a check-cashing spree.
In every case, high-tech printers and scanners enable counterfeiters to make checks look so authentic even bank tellers can't detect the forgeries, according to the Federal Trade Commission.
We contacted your bank, Union Bank of California, whose spokeswoman Katie Pandes said they're "very sorry" about your financial loss.
"If a customer reports an instance of check fraud within six months, we will work with them to verify and consider it for a potential refund," Pandes said.
Unfortunately, your discovery of 11 fake checks written using your banking information did not occur until much later.
Generally, most banks and credit unions will reimburse your losses, as long as you report fraudulent activity promptly, usually within 30 to 60 days of getting your statement.
After that, you're out of luck.
Although your bank, like most others, uses check-processing software designed to flag suspicious activity, the phony duplicate checks on your statement were only marked with an asterisk, indicating they were out of sequence. We're told that banks don't typically flag those as potential problems because consumers may have inadvertently re-ordered new checks using the same sequence or have a regular payment that re-uses the same check numbers.
As you discovered, it's not easy to recover losses. You can sue in civil court to recover up to three times the check amount, or $1,500, assuming you can identify who wrote the check.
In Sacramento County, "We average 250 to 300 identity theft cases a month, the vast majority of which are check fraud cases," said sheriff's spokesman Tim Curran. But because of staffing limitations, most of those do not get investigated.
How to protect yourself? Review your statements promptly, whether online or by mail. Pay attention to breaks in check sequence. Don't put bill payments containing checks in your mailbox. Shred your outdated checks. (See accompanying box.)
Above all, it's critical to be your own watchdog. "The only (person) you can really trust is yourself – to check and double-check your (bank) statement," said Kam Coveyou, spokeswoman for the state Office of Privacy Protection. "It's part of living in the modern world."
Q: I'm in my 80s and have had the same Bank of America Visa card since 1967. I don't carry cash but use my Visa card for groceries, for gas and almost all my purchases. I always pay off my balance every month, but lately I've been getting some charges that aren't right.
Two months in a row, they charged me $35 for "paying early." Then last month, I was charged $39 for a late fee, even though I've never, ever been late. Each time, I've called and they've canceled the charges. Are they trying to take unfair advantage of the elderly?
– Nina R., Sacramento
A: There are no early payment charges. We checked with both BofA's corporate communications office and with the bank's toll-free "customer satisfaction" number, and both assured us there's no such charge. Assuming your balance is paid off monthly and your payment arrives by the due date, you shouldn't be hit with any late fees.
Bank of America spokeswoman Tara Burke said she's happy to ensure that you don't get saddled with errant charges.
But we all know errors can occur, so your experience is a good reminder for everyone: Review your monthly statement carefully and call your credit card company the minute something doesn't look right.
Call The Bee's Claudia Buck, (916) 321-1968
