ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, April 5, 1997 TAG: 9704070066
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: MAG POFF THE ROANOKE TIMES
Checks will be turned over to law enforcement only in cases in which fraud is suspected, officials said.
Unless you have your checking or savings account at First Union National Bank, you will have to put your thumbprint on any check you try to cash at one of its branches.
The change, which begins Monday, could prove unpopular with consumers, but is an attempt to fight fraud. U.S. banks estimate fraudulent checks cost them $800 million a year, more than 10 times as much as they lose in armed robberies.
First Union might be the largest area bank instituting this fraud deterrent, but it is not the first.
The Bank of Fincastle started the system several months ago.
"We had a severe increase in fraud," said John Kilby, president of the Bank of Fincastle. "We had to do something."
Only four people have objected to giving their thumbprints, he said. "We've been very pleased."
The Bank of Tazewell County requires thumbprinting also, although President R.E. Dodson said it seldom happens. "If it gets to that point, people just leave."
Crestar Bank is experimenting with using thumbprints at its offices in eastern Virginia, according to Freda Carper, spokeswoman in Roanoke.
In other parts of the state, Carper said, noncustomers must present two identifications, one of them with a photo. And then they must pay $5 for the check-cashing service.
Many banks simply refuse checks from people who aren't already their customers.
"We don't cash them. That's our policy," said James Hinson, president of Virginia First Bank-Southwest in Roanoke.
Neither do NBC Bank or Central Fidelity Bank, among many others.
But First Union on Monday begins the "most comprehensive check-fraud prevention program ever undertaken" in the region, according to Percy Blackburn, senior vice president for administration of First Union's 215 branches in Virginia, Maryland and Washington.
The thumbprint procedure also will be put it into effect Monday in five other states besides the area included under First Union's Roanoke-based bank.
The bank said the program reduced check-fraud losses by 40 percent in several urban and rural areas when it was introduced last June in Florida, Georgia and South Carolina. Only 1 percent of noncustomers refused the print, the bank said.
First Union described the thumbprint process as "simple, quick and clean."
An individual applies a thumbprint to the check using a new, nontoxic clear ink. It doesn't leave a stain on the thumb. "The tiny amount of clear-ink residue left on the thumb after applying the thumbprint to the check is removed easily and quickly by rubbing the thumb and forefinger together," the bank's promotional material says.
The print will go at the bottom of the check, between the memo line and the signature.
The policy, as at virtually all other banks, does not apply to people who maintain deposit accounts in the bank.
Loan customers, on the other hand, are not exempt.
People who are not First Union customers and who try to cash checks must show a photo identification as well.
Blackburn, of Roanoke, said thumbprinting serves as a strong psychological deterrent to criminals, preventing the fraud in the first place. "If you're a check-fraud artist, you don't want to leave your thumbprint behind on what could become evidence in a police investigation," he said.
And conventional forms of identification, such as a driver's license, are easily faked, Blackburn said.
In addition, he said, portable printing equipment is capable of reproducing near-perfect copies of legitimate checks. Also, the checks might have been stolen along with a purse or taken from a home mail box.
First Union won't release figures for its fraud losses, but spokesman David Scanzoni said it amounts to several hundred thousand dollars a year for each of the 11 states in which it operates.
He said bank officials estimate that the new policy will affect 10 to 20 people per branch out of an average of 500 daily transactions at each branch.
First Union said its program has been endorsed by the Secret Service, Federal Bureau of Investigation, the Virginia State Police Association and the Virginia Association of Chiefs of Police.
David Carpenter, special agent in charge of the U.S. Secret Service field office in Washington, said the agency "strongly supports" the thumbprint program.
First Union said it will not maintain a database of thumbprints. Thumbprinted checks will be turned over to law enforcement authorities only in cases in which fraud is suspected.
The bank said lower-income people need not be unfairly affected because it offers a no-fee, no-minimum-balance checking account with unlimited checks for people who use automatic deposits and automated teller machines.
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