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Dear Dr. Don,
My personal information was used to open a joint
bank account without my knowledge. My signature
was forged on at least one sizable check and mailed
to this bank. The forged check cleared without
my knowledge. The bank is FDIC-insured.
Comments or tips on the best course of action are appreciated.
-- Norine Nomdeplume
Dear Norine,
This is all a bit curious. The forger can't write a check on the new account to deposit to the new account, so the forger
had to use a check written on an existing account of yours that had good funds available to clear for deposit into the
new account.
Although identity theft by a stranger is a possibility, the joint account holder is likely to be the
primary suspect. While it doesn't have to be, it sure sounds like an inside job to me.
The best course of action is to talk to the bank manager and to the police. If you haven't already done
so, do it today. As discussed below, you have to meet a standard of reasonable care in order to collect from the bank.
Here's what the FDIC's Consumer
News Publication says about forgery:
While no federal law limits
your losses if someone steals your checks and
forges your signature, you do have protections
under state law. Most states hold the bank responsible
for losses from a forged check. However, most
states also require the customer to take reasonable
care of his or her account. You may be held liable
for the forgery if you don't notify the bank in
a timely manner that a check was lost or stolen,
or if you don't monitor your account statements
and promptly report an unauthorized transaction.
Pay attention to your accounts. Contact your state's
consumer protection office to learn more about
your rights.
Many banks also purchase a form of insurance called a banker's blanket bond that may protect them
from robbery, burglary, embezzlement and other causes of disappearing funds. The banker's blanket bond would cover the bank
and, most likely, ensure that funds taken from your account would be covered.
FDIC insurance isn't particularly germane because FDIC insurance protects you from bank failure, not forgery.
Here's what the same Web page says about FDIC insurance in your situation:
Many consumers mistakenly assume that FDIC insurance must protect them from a fraud or theft if the
funds were taken from an insured account. But by law, deposit insurance only protects your accounts up to $100,000 if your
insured bank or savings institution fails.
If your bank doesn't make this right,
you should contact your state banking commissioner
and the federal Office of the Comptroller of the
Currency, or OCC. The OCC's "Contact us" page of its consumer
assistance Web site will get that ball rolling.
Not to add to your burdens, but this episode of identity theft may also touch your credit accounts. You need
to review your credit reports and, at a minimum, put a fraud alert on the reports.
I actually recommend that you go beyond
that and freeze your credit reports. The Bankrate
feature, "12
steps for victims of identity fraud," provides
an exhaustive listing of what you should do in
the wake of identity theft.
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