Congress Looks at "Remotely Created Checks" - Why Doesn't the Federal Reserve Close this Invitation to Commit Fraud?

Congressman Ed Markey (D-MA) and Congressman Barney Frank (D-MA), Chairman of the House Financial Services Committee, delivered a letter to the federal banking agencies expressing concern about the practice of allowing bankd to accept and process unsigned or “remotely created” checks.  These remotely created checks are often generated by fraudsters without authorization in the names of unsuspecting victims. The New York Times ran a story last month that highlighted problems with these checks (“Bilking the Elderly, with a Corporate Assist”, May 20, 2007, A1). 

This is not the first time these checks have received public criticism.  In 2005 the Attorneys General of 35 states urged the Federal Reserve to prohibit financial institutions from accepting remotely created checks as a form of payment precisely because they can be so easily used to commit fraud.

Link to Press Release:  http://www.house.gov/apps/list/press/financialsvcs_dem/press061107.shtml

(ag) June 14, 2007, in Consumer Protection