Fraud: Bank Account At Risk If You Publish Your Checking Account and Routing Numbers Online
Our company’s 15 year old business checking account was just hit with dozens of counterfeit checks being presented for payment by defrauded consumers on Craig’s List. So far, the total exceeds $100,000. Small companies have enough dragons to slay without having to worry about a “Catch Me If You Can” counterfeiter and crook. I am not Tom Hanks and this crook is not Leonardo DiCaprio - but I hope this article helps protect both consumers and companies.
About three weeks ago, the day started with a phone call to my company from a woman in New Jersey telling me that she had just received for $4,600 as payment for a car she was selling on Craig’s List. She told me the check was written from my company and was calling to see if it was legitimate. My response was obviously no.
I logged onto my account at and saw that one of these counterfeit checks, this one for $3,800, had already cleared our company account. I immediately contacted Bank of America and implemented the following:
- Closed the 15 year old account.
- Opened a new account.
- Got reimbursed by the bank for the full amount of the counterfeit $3,800 that had already cleared.
- Had to scramble to replace two legitimate checks I had written to my vendors that had not yet cleared the bank.
- Had to change all the ACH accounts I use for automatic funds transfers to and from my business account.
- Turned the matter over to the F.B.I.
- Total time impact to me and my company for all of this hassle: about 4 hours.
- Total dollar cost to me - zero. Bank of America even offered to cover any and all costs I might suffer from returned checked.
I was impressed how Bank of America handled everything about this corporate identity fraud. They sent me copies of some of the more than two dozen counterfeit checks that subsequently got presented for payment. It looked like a good check – complete with my company’s name, account number and routing number. But it listed the wrong bank branch.
Apparently, based on the half dozen calls I answered from other check recipients, this crook was trying to buy used cars from listings all over the country - from California to New Jersey to Texas – with all of the prospects for his scam being found on Craig’s List.
Unfortunately, the individuals selling their cars are the ones at risk. Bank of America doesn’t appear to have gotten burned by any of these since they simply reversed the deposit on the unsuspecting sellers who deposited the checks in good faith. Hopefully, few if any, sellers sent their titles to the crook and were smart enough to wait until the check cleared the bank and then some.
Bear in mind, once the crook has your account information, he almost doesn’t care if the account has no money or is closed. He can still keep issuing counterfeit checks.
In doing my own post mortem on how this could have happened, the weak link appears to have been our own company web site. Two of my companies, Ceo Resource and Start Up Company University, have international clients for our consulting that specializes in helping start up companies and their CEOs. As a result, many prefer to wire funds to us instead of using credit cards or mailing checks.
Like many companies large and small, we posted wiring instructions at our web site. Part of this wiring instruction includes the account number and the routing number. These two bits of information, along with your company name and address, are all that a crook apparently needs to produce a counterfeit check.
If you have this information posted now, I strongly suggest:
- Do as I have done – and remove that information.
- Handle wiring requests on a one to one basis.
- Protect your account and routing numbers like passwords
I hope this article helps other small business owners avoid this particular dragon.
