THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, August 28, 1996 TAG: 9608280404
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY JEFF BARNARD, ASSOCIATED PRESS
DATELINE: GRANTS PASS, ORE. LENGTH: 58 lines
Can an ink pad selling for $2.75 help stop millions of dollars in bogus check losses for banks and other financial institutions?
Banking groups in 16 states think so - and they're urging members to put noncustomers' thumb prints on the backs of checks so that if one turns out to be bogus, police have a leg up on catching the crook.
With 63 billion checks written each year, fraud is big money. The American Bankers Association found commercial banks lost $815 million to check fraud in 1993, while bank robbers took just $65 million, said spokesman John Hall.
Around the country, more and more banks are starting to fingerprint check-cashers and of those who have implemented a program, many have seen fewer fraud cases.
The banks don't keep fingerprints on file. The print goes on the back of the check and stays there unless the check turns out to be phony. Then police can use it to positively identify the person who cashed it.
The Texas Bankers Association is leading the way in fingerprinting. Three months after thumb prints became a requirement, seven regional banks showed an average 59 percent reduction in check fraud losses, said TBA spokesman Lenelle Freeman.
And others states are considering fingerprinting, including Virginia, Alabama, Arizona, Florida, Idaho, Illinois, Louisiana, Minnesota, Nevada, Ohio, Oklahoma, Oregon, Washington, West Virginia and Wisconsin.
While no one yet has been convicted as a result of the prints, many industry watchers believe that the deterrence alone can be a powerful tool.
``Crooks will tell you there are two things you want to avoid - going to places to write bad paper that take your picture, and most of all they don't want to cash a check at a place that takes a print,'' said Beaverton, Ore., police detective Chuck Warren.
With phony identification so easy to get, even from the state Motor Vehicles Division, a signature is no longer enough to identify someone, Warren said.
But others say that smart criminals will still find ways around the system.
``It may from time to time scare someone who is just passing a check because they are desperate and need the money,'' said security consultant Frank Abagnale of Tulsa, Okla., who claims to have written $2.5 million in bogus checks before spending 12 years in federal prison.
``But it is certainly not going to stop somebody who has any common sense of the fingerprinting system or who has never been fingerprinted.''
And some bank customers feel the fingerprinting could be an invasion of privacy.
Judy Draper was shocked when her local bank, the Bank of Southern Oregon in Medford, began requiring thumb prints in May.
A single mother who owns her own home, Draper doesn't like checking accounts. She prefers to cash her paycheck and pay her bills with money orders she buys at a grocery store.
``The clerk knew me by name,'' said Draper, the office manager for a group of psychologists. ``They know my boss.'' ILLUSTRATION: Color photo by CNB