Fraudulent Activity

We just experienced fraud on one of our bank accounts. This is an account we use for all of our grant writing. Somehow they have images of our checks and have been able to remake checks payable to themselves. We had one that succesfully cleared our account, but have been able to stop others. We closed the account and are now reviewing every pending transaction closely.

Has anyone experienced this and what did you do to help prevent future fraud? Are there any other ways to send out grant money that is safer than mailing checks?

Thanks in advance!


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    KentWeimerKentWeimer Posts: 121 ✭✭✭
    First Compass Anniversary Beer Expert First Comment First Answer

    We are on the receiving end of donations and prefer ACH, especially during the pandemic. One community foundation sending us a large donation from one of their account holders actually has changed their practices since I requested a wire transfer rather than a check.

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    JenniferBrambleyJenniferBrambley Posts: 34 ✭✭✭
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    Hi Deirdre. When you had your experience with fraud, what fund did you apply the activity to? We originally applied the fraudulent check that cleared to our Operating Fund, but our CEO was asking if we should create a "Fraud Fund" or something to that affect so it doesn't hit our Operating Fund.

    Any thoughts on that?



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    DeirdreHamillDeirdreHamill Posts: 8
    First Compass Anniversary Groundbreaker


    The fraud was a temporary charge and we never incurred expenses that would have warranted allocating to a "Fraud Fund".



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    JenniferBrambleyJenniferBrambley Posts: 34 ✭✭✭
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    Thank you!

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    BonnieFadelBonnieFadel Posts: 9
    Summit 2024 First Compass Anniversary First Comment 5 Likes
    edited August 2021

    @JenniferBrambley I know this is late, but I have a suggestion: Ask if your bank provides Positive Pay or a similar fraud control service.

    When you write checks, you load the date, amount, check number and payee into the bank's secure website. The information must exactly match the paper check. If you're using software such as Quickbooks you can set up a standard report to help you upload the details, and it eliminates typos. Then, if someone submits a fraudulent check that does not match what you've submitted, the bank will require you to verify it before paying. If you don't verify, the check will not be honored by the bank. Valid checks get paid without any additional steps on your part.

    It does require a little extra work in the upload, but it provides strong security. We use this for all checks, and even though we're moving towards ACH, it still protects the account from fraud.

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