THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 8, 1995 TAG: 9501070197
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 85 lines
Retailers used to accept checks because they knew the friendly faces behind the checkbooks.
No more.
As the number of merchants burned by fraud rises, more are paying for services that weed out bad checks and chase down the people who write them.
That's why the cashier who has known you for years still must see your driver's license and sometimes a credit card before accepting your check.
Check-verification and check-guarantee services play a large role in how much identification retailers request from shoppers. Dick Ogden, who runs one of the area's largest check-collection and check-approval agencies, tells retailers using his services that they should ask for a picture ID and telephone numbers.
``You've got to look at the driver's license,'' Ogden said. ``That is the most important thing. All you have to do is look at the picture and see if it matches. Then, you look at the address and see if it matches.''
Several types of services try to weed out criminals writing bad checks or people who frequently bounce checks.
Houston-based TeleCheck, for example, offers several services, including one that guarantees checks. Like car insurers, check-guarantee services won't take on any retailer with a high rate of bad checks. And they tend to be more expensive and stricter because they absorb losses.
Other check services may not offer guarantees, but they will verify whether checks are likely to be good or bad.
Ogden Check Approval Network, for example, will run a shopper's check by all of the 2,500 merchants under its umbrella. The service lets a store know whether bad or bounced checks have been written on shoppers' bank accounts in recent times. The shopper's check-writing past also can be screened by using Social Security numbers, which are on Virginia driver's licenses.
Wal-Mart uses a system similar to Ogden's.
``It speeds up the whole process,'' said Keith Morris, a spokesman for Wal-Mart. ``When they come to the register, they just sign their name of the check and we ask for their driver's license.''
But both services have their drawbacks. Customers sometimes get upset when asked for extra identification. In addition, the service doesn't always say yes or no; it merely tosses out a red flag.
For example, if you used checks to go on a one-week spending spree, the last store you visit might not accept your check even though there's enough money in your account.
The reason?
An unusually large sum of money has been spent in a short period of time, which is often what crooks do.
All the retailer has to do is tap a few keys or use a sensor to read numbers on your check to find out whether you've been writing lots of checks recently.
The check-verification service won't tell the retailer what to do in this instance. The merchant will have to make that decision.
The services aren't foolproof, partly because crooks have learned how they work, Ogden said. They know that many of the services don't share information on merchants. For instance, a person can bounce checks at a gas station using Ogden's service and then at a department store using another service.
That's why retailers might request additional identification and personal information from shoppers such as a credit card or telephone number or why they might refuse to accept out-of-state or low-numbered checks.
Despite the many precautions, some bad checks still go undetected. And when that happens, retailers might turn to collection agencies, the bounty hunters of the financial world.
Over the years, Ogden met hundreds, maybe thousands, of bad-check writers. He usually doesn't mind the sort of person who's truly shocked at bouncing a check. That person, whose paycheck might not have cleared on time, coughs up the money and the penalties.
But some people, he says, write checks knowing there isn't enough money in their accounts. Others are using stolen checks.
Ogden's company calls shoppers and asks them to pay. Those who don't end up in court.
The criminals are to blame for much of the hassles honest customers face, said Bill Coiner, head of the Virginia Retail Merchants Association.
While customers might complain, ``unfortunately, it's the merchant that takes the fall,'' Coiner said. ILLUSTRATION: Color photo
Dick Ogden runs one of the area's largest check-collection
agencies.
by CNB