USAA savings acct hacked for 5 figures

[Running_Man]

I do not understand how it was even possible for a “Check” with a wrong name on it to be cashed, that is a primary defense of fraud in the banking system. To fail at this simplest of controls, twice is pretty disconcerting for USAA.

 

[MichaelB]

I do not understand how it was even possible for a “Check” with a wrong name on it to be cashed, that is a primary defense of fraud in the banking system. To fail at this simplest of controls, twice is pretty disconcerting for USAA.

That's not clear. If this check was deposited at another bank, and the account numbers are correct, the way USAA determines it is fraud is when the account holder reports it. The other bank is one the hook if it already paid the check to the fraudster.

 

[TrvlBug]

This is why I don't write checks on money market accounts where significant amounts of cash are kept. I transfer only the amount of money I need to the checking account and write the check on that account. Money market checks are locked away from prying eyes.

+1. I also shredded the checks received on my HELOC as well as a savings account. I only write checks on the checking account where relatively small amounts are kept.

 

[Texas Proud]

I do not understand how it was even possible for a “Check” with a wrong name on it to be cashed, that is a primary defense of fraud in the banking system. To fail at this simplest of controls, twice is pretty disconcerting for USAA.

You are under the wrong belief that they check that info...

 

[Walt34]

I do not understand how it was even possible for a “Check” with a wrong name on it to be cashed, that is a primary defense of fraud in the banking system. To fail at this simplest of controls, twice is pretty disconcerting for USAA.

Not really, USAA didn't handle it any differently than any other bank would. When I retired I handled fraud/forgery investigations and as REWahoo said this is a simple forgery and that crime has been going on for as long as there have been checks to forge.

Bear in mind that it is by far the exception that a human actually reads any given check except at the point where it is initially passed. So if I have davismills's valid account number that is all the information I need to create a check, make it payable to "Donald Duck" and then deposit it into Mr. Duck's account that I have previously created for this purpose. When the check clears I withdraw the money and I'm outa there. What's so hard about that? Or I can have fake I.D. made up in Donald Duck's name and go out and buy a new car, writing a check for it.

As far as it being prosecuted, that is now entirely up to USAA or whoever ultimately takes the loss. davismills has been made whole and other than being slightly inconvenienced he has suffered no damages so his legal status changes from "victim" to "witness". The victim is now USAA unless they can kick it back to the bank where the check was accepted, then that bank becomes the one holding the bag and becomes the victim. And that bank may in turn kick it back to a merchant, such as a car dealer, since this was in the amount of five figures, and that car dealer would take the loss.

And that bank or car dealer or whoever, then has to decide "Is it worth my time and effort to prosecute this thing? Is there a viable suspect, and is he in the U.S. or Bangladesh? What are his assets that I can get to to recover my damages?" And so on. If there is a suspect but he has a net worth of $1.28, well, going after him is a waste of a business's time and they're probably not going to bother. Why throw good money after bad in the form of paying employees to go to a trial, perhaps in a different state with all the attendant travel costs without even a slight assurance that the trial judge will order restitution?

So you can see this then becomes a business decision, not a moral or legal one.

 

[akck]

I do not understand how it was even possible for a “Check” with a wrong name on it to be cashed, that is a primary defense of fraud in the banking system. To fail at this simplest of controls, twice is pretty disconcerting for USAA.

In the incidents I'm familiar with, they just took our banking info at the bottom of the check and created their own checks with it. For all I know, the name they used may even have been their real name and address. In our case, they were buying things they apparently needed.


Sent from my iPad using Early Retirement Forum

 

[harley]

Actually, no. That was sound advice.

You're right. Just like it would be sound advice to put deadbolts on your doors and bars on your windows if your computer was hacked. Good advice anytime, just not having anything to do with the current crime.

 

[zinger1457]

If it was reported immediately I wonder if the fraudster ever saw any money from depositing the check. Most banks add additional time for large checks (>$10K) to clear. I received a sizable personal check drawn on my mothers estate recently and it took a full 10 days for the check to clear before I had access to the money.

 

[Walt34]

If it was reported immediately I wonder if the fraudster ever saw any money from depositing the check. Most banks add additional time for large checks (>$10K) to clear.

Probably not since it was caught so early, before the hold time has expired.

BTW, forum members have complained about that hold time even in the days of ACH (Automated Clearing House) - this event shows a good reason to keep those hold times in place.

 

[target2019]

You're right. Just like it would be sound advice to put deadbolts on your doors and bars on your windows if your computer was hacked. Good advice anytime, just not having anything to do with the current crime.

How can you discount this? Is it possible that some personal ID component was obtained through access to the OP's network?

 

[Texas Proud]

I know people keep talking about them stealing checking info... but I had posted earlier (IIRC) that that info is not required... someone just used my name and address and a made up check from Wells Fargo on an account that did not exist... they used the check to buy electronic equipment at the mall and walked away with their ill gotten gains...

They did come after me, but since they did not take any money out of my account I just filled out a police report...

 

[Running_Man]

Not really, USAA didn't handle it any differently than any other bank would. When I retired I handled fraud/forgery investigations and as REWahoo said this is a simple forgery and that crime has been going on for as long as there have been checks to forge.

Bear in mind that it is by far the exception that a human actually reads any given check except at the point where it is initially passed. So if I have davismills's valid account number that is all the information I need to create a check, make it payable to "Donald Duck" and then deposit it into Mr. Duck's account that I have previously created for this purpose. When the check clears I withdraw the money and I'm outa there. What's so hard about that? Or I can have fake I.D. made up in Donald Duck's name and go out and buy a new car, writing a check for it.

I am not talking about who the check is made out to but the owner of the account, if my checks have Running Man and my address on them and REWAHOO creates checks with his name and address on the face of the check, makes them payable to Donald Duck and my bank cashes them, when I call and complain it would take an instant of looking on line to see the check is a forgery, through their imaging software. It would not take days for them to identify the issue. If I understand you correctly if you are stating that if I have a correct bank routing number and account number that is all I need to cash a check, all the other information can be false? The system would implode I would think if this were true. I am not talking about the bank that cashes the check but my bank, the bank taking the check should be waiting for the check to clear the system, if they were reasonably alert.

Additionally, unless the culprit guesses a check number in close order the check number should be off as well and alert the bank to a problem. If your bank is not doing these simple steps you should get a new bank.

 

[Walt34]

If I understand you correctly if you are stating that if I have a correct bank routing number and account number that is all I need to cash a check, all the other information can be false?

Correct, as long as the check is presented for payment somewhere other than the bank it is drawn on. I've seen it done.

Now, it might be different (I retired in 2002) with electronic verification systems, but at the time the only way to verify the validity of the check was to call the drawer bank and ask them, much too time-consuming to do on a routine basis.

 

[Senator]

Getting made whole from a forged check is strictly a USA thing. Maybe the EU too, I am not sure. It is an advantage of living here in the USA and why it costs a bit to live here.

My mother, living in Mexico at the time, picked up her checks from the bank. Unbeknownst to her, a bank employee took a few blank checks from inside each booklet of checks.

The employee cashed three of them, for ~$5,000 each. One happened to go through a USA bank on it's way through the ACH system. That is the only one she was reimbursed for. The checks were written in Spanish, to CASH. The writing did not even look close to my mother's writing. Luckily, it was not her only meager account. It did take about 25% of the cash she had available to her.

When you transfer your money to a foreign bank, you live under their laws.

 

[Sunset]

..... At the time, I only had about $9,000 in the account. I was so freaked out, I went on a spending frenzy to delete the funds. I paid off my bills for two months (putting extra money on the utility bills), bought gift cards, and a US Savings Bond.

I do that as a matter of habit.
I frequently pay my bills ahead of time, or for an entire year in some cases, in the belief that if my money disappears, the thief got less since I used a bunch of it to pay off debts.