FORGERY AND FRAUD Thieves targeting credit-card checks sent through mail

Blank checks mailed out by credit card companies can be easy tools for thieves.
NEWSDAY
When he didn't receive a monthly credit-card statement late last year, John Bould had a copy faxed to him from the bank. Then he paid the bill and didn't think much more about it.
Bould presumed the November statement for the Visa card account he and his wife have with Bank of America had gotten lost in the mail.
"It never happened to us before," he said, "but you know, with the holidays approaching, these things happen."
Then the next month's statement, for December, arrived -- with a $2,200 cash advance recorded. Bould says he hadn't made that advance.
So Bould, 57, of Westbury, N.Y., called Bank of America; he got switched to the bank's fraud department and started learning more about so-called "convenience" checks, also known as "live" or "loan" checks.
Credit-card issuers send them unsolicited to customers, to transfer balances or make purchases with the cost applied to a credit card, depending on the offer.
"They're a popular payment option," said Tracey Mills, spokeswoman for the American Bankers Association, a trade group. "They're popular because they're very convenient."
Fraud is a concern, she said, though she said her group does not know how often it happens with convenience checks. "It always helps when consumers check their statements to make sure that any activity is legitimate."
Reasons for concern
The checks rankle consumer advocates who worry about the hassle associated with dealing with a theft and the temptation they can represent for a credit-card customer to go into debt, sometimes at high interest rates.
"No seller should ever send cashable checks to consumers without their prior authorization," said Stephen Brobeck, executive director of the Consumer Federation of America, an advocacy group. "These checks can create messy problems if lost or stolen."
A 1997 advisory from the Federal Deposit Insurance Corp. says a consumer does not owe anything for a convenience check used by a thief. But, the advisory adds that you'll probably spend time and effort proving your innocence.
Since the copy of the November statement Bould received had a tear-off convenience check, he believes the original was intercepted in the mail for the purpose of getting access to the attached convenience check.
Bank of America sent him a copy of the check made payable to "cash," so he knows it was cashed at Citibank and signed "J. Bould." But that signature, Bould said, was "in a handwriting that was not mine."
His wife, Maralyn -- an artist who paints under her maiden name, Menghini, and operates an art gallery with her husband -- said, "I would never have taken a check or lost it."
She thought it odd that the date on the check was written 12.03.03, not a usual way of writing a date, she said.
Company response
Bank of America spokeswoman Angela Ashley declined to discuss the convenience check that led John Bould to raise concerns or to disclose the number of such checks Bank of America sends annually.
But, she said, "Our customer research shows that many consumers desire convenience checks."
The incidence of fraud related to them is low, she said, adding that a credit is given within 24 hours of a reported theft. Bank of America allows customers to opt out of receiving convenience checks attached to their statements, according to Ashley.
To stop the company from also sending them separately requires opting out of all mail promotions from the bank. Bank of America customers can call toll-free, (888) 341-5000.
Bould canceled his credit card, received a new one and filled out an affidavit for the bank to affirm he had no knowledge of the scam. His January statement included a credit for $2,299.31 -- $2,200 plus $99.31 in related fees and interest charges, he said.
"Everything went as smoothly as you'd hope," Bould said. Still, he wonders if convenience checks are too convenient, particularly now that identity theft is a national concern. The checks don't represent a convenience he wants or has ever used.