EddieJayonCrypto
17 Jun 22
Bank check fraud is a $15B industry as per a 2020 report by the American Bankers Association, and accounts for 60% of attempted fraud against deposit accounts.Bank check fraud comes in a few flavors, including outright fake checks and cashier's checks. The latter is very popular since the very purpo...
Bank check fraud is a $15B industry as per a 2020 report by the American Bankers Association, and accounts for 60% of attempted fraud against deposit accounts.Bank check fraud comes in a few flavors, including outright fake checks and cashier's checks. The latter is very popular since the very purpose of a cashier's check is to invoke immediate trust between banks, resulting in faster transaction times (money hitting the account). It is also meant to invoke trust in the receivers of these checks since they are supposedly 'trusted' to have the funds in the sending account.The normal process is for someone to receive a check and told to deposit it and immediately send a portion of the check via another method back to the sender. So this means the person doing the deposit is making money while doing this "favor" for someone. What really happens is the check gets deposited as cash into the account. Then the person sends it. Here is where it gets interesting. After all of that, he bank finally figures out the check is either bogus or has already been deposited elsewhere. Either way, the account, if it exists, does not have the funds for the receiving bank to recoup the funds they gave to the deposit account.You guessed it! This is a bounced check and the bank then yanks back the money it gave the depositor. This usually results in the depositor owing the bank money. The salt in the wound is the additional fee is assessed on top of the funds the depositor now owes the bank. This points out a major problem and known issue in the banking industry: they have slow, antiquated technology that actually creates the almost ideal situation for bank check fraud to happen.Here is something that will blow your mind. Check volumes are declining while check fraud is increasing. What the hell?! Now you know why am I yapping about bank check fraud. I am really doing this to call out the difference between checking transactions. In the world of crypto, a transaction cannot happen unless the funds are there. AS a matter of fact, the amount of funds in the sending account is revealed on the blockchain. This means then the blockchain processes something not only is it fast, but chances of fraud are incredibly diminished. As a matter of fact, the chances of blockchain fraud in this case are so small they are just about nonexistent.I don't know about you, but I would rather run my business on crypto payments over accepting checks.