Steps to Help Reduce Checking Account Fraud

Bill Wiles, Treasurer, Synod of the Sun

Friends, recently both the Synod of the Sun and its Synod Youth Workshop subsidiary have experienced fraudulent checks being presented to our banks.  In the case of the Synod, the $3,500 fraudulent check was not paid by the bank.  However, the Synod Youth Workshop was not so fortunate, having a $4,500 check being withdrawn from its bank account.  We wanted to share this information with you in hopes that it will not happen to your organization.

There was a time several years ago when the interfacing between a local bank and a church treasurer only occurred once a month when the paper bank account statement was reconciled with the checkbook.  However, in these times of wide-spread use of digital banking technologies, a church treasurer needs to be connected with their bank on an almost daily basis. 

Electronic theft of funds can come to any church organization at any time.  None of us are exempt from this threat.  But good financial practices require us to put in place our best defensive measures.

The first line of defense is to conduct an online review of your checking accounts at least weekly, or preferably, several times per week.  Look for any amounts or vendors that you do not recognize as being authorized expenditures of funds.

As soon as you notice a discrepancy, immediately notify your financial institution.  Now.  Not tomorrow or next week.  There are often notification time limits attached to the opportunity for you to receive a refund of such fraudulent activities.

Also, immediately ask the financial institution about reimbursement to your checking account to offset the fraudulent withdrawal. That is usually provided if you ask.

One of the best ways to counter future fraud is to immediately set up a new bank account and transfer the funds in the current account to the new account.  Yes, this will entail ordering and paying for new checks, but this is a small price to pay for necessary added security.  (Side note:  You might consider ordering checks through Walmart which offers serious discounts compared to the costs at most financial institutions,)

One of the best ways to build the defensive wall is to ask your bank (1) if the offer the “Positive Pay” service and (2) if your church can participate. 

The Positive Pay system is a fraud prevention tool used by banks to verify the authenticity of disbursement requests before they are processed. It requires the issuer to provide check details (such as the amount and payee) to the bank, which the bank then uses to match this information against the check presented for payment in order to prevent unauthorized transactions.  If the authorized information does not match the check payment request, the check is not paid.

This is the system the Synod of the Sun uses, and it is why the $3,500 fraudulent pay request was refused by the bank.  The Synod Youth Workshop organization is now planning to add this fraud protection service to its own bank account.

I hope you found this information useful.  Please contact me (918 607-2309 or at bwiles@chooseGod.org) if you wish to discuss this further.

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Bill Wiles, Synod of the Sun Treasurer, Ruling Elder and Commissioned Pastor, serves as a Financial Coach for the Presbyterian Foundation and holds professional licenses as a Certified Public Accountant and a Chartered Growth Management Accountant.  He received his undergraduate degree from the University of Tulsa and his Master’s degree from the University of Oklahoma.  Bill is an award-winning author and currently serves as a board member of the Presbyterian Historical Society of the Southwest, the Omaha Presbyterian Seminary Foundation, and Dwight Presbyterian Mission.