If You Think MICR Readers Stop Fraud, Think Again
If You Think MICR Readers Ssop Fraud, Think Again
For some time now, there has been a growing use of MICR readers at the Point-Of-Sale, to read the MICR (Magnetic Ink Character Recognition) information on the bottom of checks. This approach has, on a small scale, been replacing the tried and true Drivers License, as Point-Of-Sale identification.
The problem is, of course, that it is much easier to get another bank account, or to simply make one up, than it is to counterfeit a drivers license.
Check fraud is an ever growing problem, and now the FBI has stepped in on a very high profile example of the MICR problem.
On October 18, 1995, the FBI announced the arrest of a Merrillville, Indiana family accused of check forgery for more than $1 million against Northwest Indiana and Chicago businesses.
Wayne R. Alford, special agent in charge of the FBI's Indianapolis Division said that Naperville, Ill., police are holding Lynette Griffin, 49, and her son, Aaron, 29, on felony charges filed in Lake Superior Court.
Police said both lived in the 1800 block of West 85th Avenue in Merrillville this summer.
He said Illinois police also arrested Lynette Griffin's daughter, Carla A. Griffin, 30, of Chicago, and returned her to Lake County.
The Lake County prosecutor's office and Merrillville police allege all three committed fraud on a Merrillville bank.
Each face a maximum penalty of eight years in prison and a $10,000 fine if convicted.
Alford alleges the Griffins have stolen more than $1 million from area merchants since 1993 by writing checks on closed and non-existent accounts at 11 financial institutions in Indiana and Chicago under 25 different names.
Merrillville police allege each of the three family members opened accounts in August at the Calumet National Bank branch in the Strack & Van Til supermarket at 7201 Taft St., Merrillville.
Special Agent Dennis Hyten of the Merrillville FBI said his agency became involved because the banks are federally insured and the scheme allegedly involved interstate transportation of stolen property.
Police, executing a federal search warrant, raided two homes Oct. 11 in Aurora, Ill., arrested the three Griffins and confiscated what they said were forged documents, credit cards and checking account information.
The FBI said Lynette Griffin also is charged in Naperville, Ill., with bank fraud. "Simple ID steps at the point-of-sale could have prevented thousands of lost dollars," said authorities.
We should remember stories like this the next time a retailer is asking to use MICR rather than Drivers License for approval. Although MICR must often be accommodated, only because the retailer already owns MICR readers, and doesn't want to feel foolish for having purchased them. The merchant should be made aware that MICR check guarantee will always result in a higher discount rate, because the ID simply isn't as good as the Drivers License.
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