Chapter 5 – Blank Checks Destroy Bank Accounts

Crime Number 3 – Leave the check book at home

You should not carry your checkbook or blank checks unless you plan to write a check that day.

If I had a dollar for every person that I know or have met that carries their checkbook with them everywhere they go every day, I could pay your bills for a year. Why do you carry it? Really, why do you have it everyday? I would like you to take a piece of blank paper and write down why you always carry your checkbook or keep it in your car. Stop now and write your list.

Done? Good. Now let’s see if we can change your thinking. Your checking account’s survival may depend on it. Why do you keep your checkbook on hand at all times?

1) Excuse: You never know when you may buy something. Response: Great, now think about your shopping patterns. If you are going the mall for Back To School clothes and supplies, it makes (some) sense to take your checkbook. But if you are going to work on Tuesday and after work you plan to go home, why do you need the checkbook? Is your need for a security blanket so great that you are afraid to not have the checkbook even if you have gas in the car, groceries in the refrigerator and lunch money in your pocket? Try this: for 90 days track all of your purchases. For all purchases, log when (Monday, Tuesday, etc.); how you paid, the item(s) and why you bought it. After 90 days, if you are typical, you likely will have made, at most, a couple unplanned purchases using checks. If so, then did you need your checkbook with you every one of those 90 days? And could you have used cash or a credit card for these purchases?

2) Excuse: You receive your bills at a Post Office and you like to pay your bills the day you receive them. Response: Wow that is great and very responsible of you. But, do you really want to be opening such confidential mail in a public place? By opening it away from home, you risk losing some important part, like the part with account numbers and addresses. And what of people looking over your shoulder while you write checks, or fill out confidential information? Do you still want to do it this way?

3) Excuse: You like to use checks because it gives you a record of your purchases. Response: But what about the cash register receipt? If you use a debit or credit card you also have a receipt.

4) Excuse: You do not want a credit card and do not trust credit card companies. Response: Who does trust the credit card companies? But it saves you from carrying large amounts of cash and at the end of the month you get a nice itemized bill. If you don’t have and don’t want a credit card, go back to item 1 – do you really always need your checkbook? Do you carry cash to handle most events? Although it goes against the grain of this information if you must carry checks, then only carry 1 or 2. If they are stolen, you have cut down on the number of opportunities for someone to pass a forged check.

Please consider this – Do you carry an ATM/Debit card? Almost all places that take a check will take an ATM card. Why have both? Many places, because of past bad checks, no longer accept checks but do accept Debit Cards. Another reason to carry a checkbook goes up in smoke.

One way to not have credit cards and not carry checks is to use Pre-Paid Credit Cards. Since the money must be deposited before the card is useable, it prevents you from over spending your limits/budgets and you avoid the pitfalls of high interest rates.

Related to checking account theft is the use of voided checks to set up repeating payments. One recent source of fraud has been health clubs/gyms where the member provides a voided check so their monthly fees can be charged to their account. (It should be noted that most gyms/health clubs are not crooks and are honest. Your concern is not most clubs, but your club, or just that one employee at your club.) A fat lot of good it does to write void on a check and hand it to someone. They still have your bank name, ABA code, your account number and address.

The same miracle of technology that allows a legit business to submit payee checks is the same technology that allows a less than legitimate business to submit payee checks. Either way the funds are debited to your account. And if someone gets access to your checking account this way, the only way to stop the transactions from happening again and again is to close the account and open a new one. This means you will have to order and pay for new checks and change any direct deposits or automatic payments such as mortgage or insurance. And the ability to recover the money is based on the policies of your bank.

If you use a credit card for auto-billing, the issuing bank may catch problems and shut down the card before it grows. With direct debit from a checking account, the account most likely will not be shut down until you are already overdrawn. And if you have overdraft protection, then the amount of your overdraft protection will also be used up increasing your losses even more. If possible, use a credit card and maybe use a card for one or two items so that when you get your bill, you will immediately notice anything that is out of line.

Think about it every time you are asked to mail or fax a voided check to a business “for their records”. How important is it to you to do business with this business? Sometimes you have no choice, sometimes you do. Choose wisely.