So I was reading an article over at Consumerist: Check Fraud Is Alive, Well, And Preventable, which talked about check washing, where you use water or some chemical to dissolve regular ink off a check, and write a new amount and maybe even a new payee. They then suggested the use of a “secure” ink instead of a regular ballpoint pen to prevent this.

This got me thinking. How often do people use checks these days? Back in the day before credit cards and eChecks, I can see this as common scenario. I mean once in awhile I still see someone at a supermarket or Costco take out their checkbook to write a check. Speaking of which, apparently if you want to use a check at Costco, the check has to be in the card holder’s name. However, they’ll accept debit/credit cards that are not in the card holders name which I found interesting.

Anyway, back to the original topic. When I see people whip out a check, it always surprises me why in this day and age they’d want to use a check and not a debit card per se. I’ve always seen checks as inherently flawed due to the fact as long as someone has your routing number and your account number (both available if they get ahold of a copy your check), they can then produce their own checks with the same information. There’s some verification these days, but not everyone does it. Also, all it takes for me to link accounts is a routing number and an account number. Some financial institutions have a secondary check where they make 2 small deposits into the account you want to link and make you verify you’re the account owner. A long time ago, I thought I’d open a bunch of checking account and link them all to PayPal and make them deposit tiny amounts. However, that plan was scrapped after I decided how much effort was needed to just make a very small amount (similar to the scheme where you get those coupons/rebate forms that have 1/100 cent value and cash in. KACHING!)

Anyway, in this age and time, I only write checks to people I’m familiar with and trust. Everything else, I do bill pay/eChecks (where the bank transfers the money or mails the check for me). I don’t think I’ve ever used my bank card as a debit card either. The last check I wrote was to Derek since we were splitting a huge order and the amount was not a friendly figure. Before that it was probably back in college and I don’t even remember what anymore. Maybe to link my account on ING Direct?

I have 6 check books (3 for Washington Mutual and 3 for Bank of America) and have not completed one of those checkbooks yet. I got them when I first opened my accounts which was right before I went to college.

Another interesting point is that I never keep over $500 in any of my checking accounts, usually around the $200 range. The reasoning behind that isn’t because I don’t think its secure. It’s just that they have 0% interest, so I have no reason to keep money there besides paying bills, which I’ve already swapped over most to my ING Direct Electric Orange account.

Similarly, this article was posted a few days later: Fraud hits home — my front porch! (from Consumerist) – If you close your account because some jerk stole your student loan payment check and is trying to cash it, you might want to switch banks. Otherwise, Bank of America might helpfully link your new account to your old one so the #%@$# can still cash the stolen check.

Obviously Bank of America is in the wrong here and they should’ve done everything they could to rectify the problem as soon as possible with least amount of inconvenience to their client, but of course this is never the case. They probably made it even worse by making the client jump through hoops to resolve this problem. But that leads me to the main question of this entry. Why wasn’t he using bill pay or EFT (electronic fund transfer) to pay his student loans? I even get an extra 0.25% discount on my interest when I chose EFT. That way, a random check of yours could not have been stolen and if electronic transfer was not and option and Bank of America had to print and mail a check, chances of that being altered/forged is very unlikely given that they printed the check with “secure” ink and probably have a way to verify the check’s information.

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