Bad checks still persist
The use of paper checks in business transactions is declining rapidly.
The number of bad checks? Not so much.
Washoe County District Attorney Richard Gammick said a few weeks ago that total collections by the fraudulent-check program in his office crossed the $8 million mark since the program was launched in 1992.
And the number of bad checks sent to the DA’s office hasn’t been slowing much in recent years, says Rachael Muro, who heads the check-fraud diversion program.
In an era in which debit and credit cards have almost universally replaced paper checks at grocery store checkouts, the continued number of bad checks is a surprise.
While no one keeps tracks of the total number of paper checks that flow through the financial system of northern Nevada, a study by the Federal Reserve late last year found that the number of checks handled nationwide in 2012 was less than half the number from 2003.
Checks accounted for 46 percent of payments that weren’t made by cash in 2003. By 2012, that percentage had fallen to 15 percent as debit-card payments increased dramatically.
Muro notes, however, that consumers in Washoe County apparently continue to use checks extensively to pay for personal services — hairstylists, doctors and dentists, veterinarians.
Casinos, which cash personal checks and rely on blank checks to guarantee the markers that provide credit to approved players, also continue to handle substantial numbers of personal checks.
Both categories of checks present their own headaches to the DA’s fraudulent-check program.
The basic advice that the district attorney’s office provides to merchants that accept checks hasn’t changed for years — ask for photo ID, compare the photo on the ID to the person standing in front of you, record the ID information carefully, be super-careful with high-risk items such as temporary or low-numbered checks.
But all that becomes a headache for the hair stylist who’s been taking a check from the same client every Friday since Spiro Agnew was vice president. Those service providers, Muro says, need to have some information on file on their clients to support a filing with the DA’s office in case things go sour.
Casinos, meanwhile, are victimized by visitors who write a cash or leave an account-closed check as a marker, then catch a plane with the assumption that Nevada gambling debts can’t follow them home.
Gammick says the district attorney’s office asks a judge to issue an arrest warrant for a casino patron who skips out on a bad check. That’s usually enough to bring quick payment.
The flow of visitors through Reno, Sparks and Lake Tahoe also draws occasional visits from organized bad-check gangs.
“As a tourist center with a fluid economy, our community can suffer major financial harm when goods or services are stolen through the use of fraudulent checks,” says Gammick.
Not all of the well-planned check frauds are perpetrated by visitors.
A Sparks man, for instance, was arrested a couple of months ago for investigation of check-fraud charges after authorities said he apparently used bad checks to purchase gift cards and other items at charity auctions.
While the district attorney pursues criminal charges in some check-fraud cases, other offenders are ordered to make full restitution through a diversion program. If they fail the requirements of the program, they face prosecution.
Muro says the DA’s staff conducts quarterly meetings with business owners and managers to review recent trends and prevent strategies in check fraud.
Those discussions have shifted focus as the economy recovers.
The number of checks — including bad checks — floating around the system declined as economy activity chilled during the Great Recession. At the same time, Muro says, bad checks proved exceptionally difficult to collect in the time that no one had any money.
A positive sign as the economy recovers: Muro says fewer folks are getting paychecks that later bounce.
Irwin has worked extensively with Department of Energy contractors in Southern Nevada and recently served as a member of the Judge Advocate General’s Corps for the Nevada National Guard.