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Banks Put Finger On Bad Checks (This article was submitted in August by Dennis Uyeda, CAL-DOJ . Thanks Dennis. I apologize to the original publisher and our readers as I have misplaced the information regarding the original publication.)
By VERNON SILVER When Marilyn Decker walked into a South Trust bank branch to cash a check, she figured a teller would hand over money and she'd be on her way. Not so fast, the teller said. First they'd have to fingerprint her. Decker, 44, a housewife form Port Charlotte, offered the teller a driver's license and credit card to back her claim on the $200 check written by her sister from a South Trust account. “That wasn't enough for them,” she says. “They wanted a thumbprint. I thought that was a little much.” Increasingly, U.S. banks are requiring noncustomers to leave their thumbprints on the faces of checks before they can collect their cash. Banks say the practice, now seen in all 50 states, cuts fraud. Many consumers, including Decker, say it's an invasion of privacy and bad service especially if the banks want to turn those noncustomers into customers. “It's not like I've got anything to hide, I just don't think it's necessary,” says Decker, who drove to her own bank to cash the check. “I'm not going to give them my thumbprint.” Banks defend thumbprinting, which is promoted by the industry's biggest trade group, the American Bankers Association, and practiced by the nation's largest banks, including No. 1 Bank of America Corp. Banks that require fingerprints see an average 60 percent drop in bad checks being passed, says Diane Poole, director of the American Bankers Association's technical services division. As the practice catches on, the industry will reduce the fast-growing losses from check fraud, which now exceed $1 billion a year, she says. “People don't recognize how large the fraud costs are in banking and the fact that they're increasing,” says Richard Kovacevich, chief executive of San Francisco's Wells Fargo & Co., the seventh-largest U.S. bank. The increase comes in part as check counterfeiters get their hands on computers, scanners and color laser printers. “Technology, as wonderful as it is, is also the friend of the criminals,” Kovacevich says. To fight back, banks are using simple technology: an ink pad. In most cases, banks ask noncustomers to press a thumb on the pad which has ink that sticks to paper, but not to skin and leave a print on the face of the check. Banks say they don't keep a database of fingerprints and examine the marks only if there's a problem with a check. Many bankers say fingerprinting is their best option as they balance fighting crime and the public's privacy concerns. “If it's approached in the right way, people can understand that you're trying to protect their assets and the corporation's,” says Jerry Grundhofer, CFO of Firstar Corp., the 15th largest U.S. bank. Firstar fingerprints noncustomers in Missouri and Ohio, in keeping with local competitor's practice. Fingerprinting — known euphemistically as “touch signature” had a brief life in the 1980's at Chase Manhattan Corp. but didn't catch on until years later, says Poole of the American Bankers Association. The old BankAmerica Corp.resurrected it in 1997 “in Las Vegas, because they had a problem with a lot of bad checks being passed,” she says. From there, it spread to California and Texas, where some banks reported 75 percent to 80 percent drops in check fraud. While every state has some thumbprinting, it's been slow to catch on in New York, where many banks, including Chase, normally won't let noncustomers cash checks drawn on the bank, even if they leave a print. Complaints about fingerprinting don't just come from people who cash checks. People who write checks and hear back from angry relatives or employees who had to stick their thumbs in ink are up in arms, too. In many cases, banks also charge a fee, adding to the public's annoyance. Bank of America and BankOne Corp. each charge noncustomers $3 to cash a check right after fingerprinting them. At SouthTrust, where Decker tried to cash a check, thumbprints are required at all of the bank's 630 branches in eight states, says Linda Baker, the company's manager of corporate communications. “SouthTrust has been doing this for about a year and our customers are getting used to it, and they think it's being done for a good reason,” says Baker.
This article was printed in “THE PRINT” |