Consumers urged to watch for fraud

Consumers urged to watch for fraud

Consumers might want to monitor their checking accounts a bit more closely and be wary of cashing certain checks in light of several warnings issued about a Web site which allows people to create their own checks.

At the Web site,, registered participants can create and issue checks for a fee. But the Web site, which is owned by Neovi Data Corporation, does not investigate or verify any of the transactions, warned the Federal Deposit and local police.

As a result, some, but not all of the checks associated with Qchex, may be fraudulent, stated an alert issued this summer by the FDIC.

"It has been a problem at local institutions already," said Champaign Police Detective Pat Kelly.

How it works: People can register on the Web site, and the site sends paper checks to companies or people. Or, users can send demand drafts via e-mail. Demand drafts do not require signatures in order for money to be withdrawn from an account. With demand drafts, an e-mail is sent to the recipient, who can then print the check.

How do you know if the check you receive is legitimate or not? Or the person is who he says he is?

"You don't. That's just it," Kelly said.

What can happen: Someone who has your checking account number and bank routing information can set up an account and create checks. Or, you can unknowingly cash a fraudulent check sent your way.

Greg Anderson, vice president of the University of Illinois Employees Credit Union, has seen both situations – where customers' accounts have been illegally accessed and where customers have cashed fraudulent checks.

"It's a real perilous situation," he said.

So the credit union no longer accepts the checks.

"Our experience has been very negative. ... I'm not sure we received any that were good," Anderson said.

The Privacy Rights Clearinghouse, a San Diego-based consumer advocacy organization, also issued an alert about the potential for fraud and urged people who buy or sell products online to be especially careful.

Consumers have reported receiving fraudulent checks via for products sold online. A purported buyer will create a check for an amount over the sales price, then ask the seller to send the extra amount back via wire transfer.

If you are offered or receive a check from someone who used, "knowing what I know, I would ask them to pay me in a different manner, via wire transfer or cashier's check because our experience has been there's a very high frequency of fraudulent transactions," Anderson said.

A message left with Neovi Data Corporation was not returned.

Under the terms of the agreement on its Web site, the company states, "Qchex does not endorse, guarantee, verify or investigate transactions undertaken by users of"

The Web site also states, "Technology and anonymous Internet access make it a simple task to assume another's identity, by entering other's financial data into Qchex or other Web-based services, with criminal intent. As an open platform of communication and commerce, the Internet provides only poor and inefficient means for ID validation unless combined with traditional forms of validation such as face-to-face transactions."

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