Olympia Credit Union Discovers Counterfeit Checks in Circulation

Olympia Credit Union alerted the Washington Department of Financial Institutions Monday that counterfeit checks bearing the credit union’s name are surfacing in the area.

According to Olympia’s website, the checks are apparently being mailed from an H&R Block branch at 1200 Cooper Point Road in Olympia and are “drawn off an Olympia Credit Union account. The letter states that these are sweepstakes winnings. These are fraudulent checks and this is not an Olympia Credit Union account. If you attempt to cash these checks, it will be returned!”

Olympia CEO Tammy Allender explained the complicated process of discovering and reacting to the counterfeit checks.

“Our front line staff received a call to verify funds on one of these checks,” she said. “We informed the caller that the check was not valid, and then that staff sent an email out to the rest of the staff as a heads-up. More calls came in, and all staff informed the callers [the checks] were fraudulent. We had one institution that had kept their client’s ‘winning’ letter along with a copy of the check, and they faxed it over so we could take a look. We then saw some of these checks showing up on our exception report and of course those checks were returned.”

From there, Allender reached out to any and all possible contacts, including the credit union’s Department of Financial Institutions (DFI) examiner, her CUES network group and the Northwest Credit Union Association (NWCUA). She received input and assistance from small banks and credit unions on the East Coast as well, who were able to connect Olympia with additional resources.

“I think the best thing right now is just get the word out,” Allender said. “I hope we stopped some losses by educating our staff and sharing our knowledge with every contact network we had access to. Staff training is another important factor. Here is a check from H&R block out of Olympia, Wash., issued to an East Coast consumer. Just a couple of key questions could get that consumer to talk about what this check is for, and right away any financial institution staff with any training would know this is not legit. Taking that few extra minutes to look up Olympia Credit Union on the internet and call us to validate the check saved several institutions and their clients a loss.”

The counterfeit checks also pose a certain regulatory challenge for the credit union.

“In terms of compliance, we are aware that this will need to be reported as a SAR,” Allender said. “I don’t know if it is a compliance requirement to send out alerts, but it seems only right in an effort to stop these fraudsters from gaining any profit from the scam. Maybe if the scams become less fruitful, we will have less of them out there.”

The fake cashier’s checks show 32518090 as the routing number.

An upcoming training presented by the NWCUA promises to help credit unions prepare for and address situations like the one Olympia Credit Union is currently facing. The Account Administration Seminar is a one-day training scheduled for April 4 in Federal Way, Wash., and for April 5 in Tigard, Ore. It will cover the key aspects of opening, maintaining, and closing deposit accounts, including the types of account ownership and how to protect credit unions in disputes among owners and other claimants.

The Account Administration Seminar will also discuss the basic rules governing forged and stolen checks and non-sufficient funds, as well as how the key federal regulations apply to deposit account operations. Hal Scoggins, an attorney with the law firm of Farleigh Wada Witt, in Portland, Ore., will facilitate the training. With a practice that focuses on state and federal regulatory compliance, deposit and lending operations, contract and business matters, corporate governance, CUSOs, and all other aspects of financial service delivery, Scoggins has been providing legal advice to credit unions since 1991.

Registration information for the Account Administration Seminar is available on the NWCUA’s website. Click here for the Federal Way, Wash. seminar or here for the Tigard, Ore. seminar.

Anyone with additional information on the counterfeit checks is asked to contact Olympia Credit Union at 360.754.5559.

 

Questions? Contact Training Programs Coordinator Yuri Jung: 206.340.4817, yjung@nwcua.org.

Posted in Compliance, Events, Federal, NWCUA.