FTC Kills Dirty Online Check Processing Outfit

coondoggie writes "The Federal Trade Commission today got a US District Court to stop permanently what it called the illegal operations of an Internet-based check creation and delivery service, and to require the group to give up over half a million dollars in ill-gotten gains. According to the FTC, Qchex.com created and sent checks drawn on any bank account that a Qchex user identified, but did not verify whether the user had authority to draw checks on that account. As a result, fraudsters worldwide used the Qchex service to draw thousands of checks on bank accounts that belonged to unwitting third parties. 'The evidence shows that the launch of Qchex.com was a "dinner bell" for fraudsters and resulted in a high number of accounts frozen for fraud...' said District Court Judge Janis Sammartino."

Comments

Check Security

[Adrian Lopez]

Checks are insecure. The lesson: withdrawing money from people's account should require more than an account and bank routing number.

Re:Check Security

[narcberry]

When I was taught about checks in high school, I was taught that all that matters is that a document is signed signifying the amount of money, the recipient, and the banking account number. I'm glad to see we can forgo the contractual aspect of checks, and reduce it to a set of numbers, both of which are found on every check. Glad my bank honors that. It's comforting to know that my entire savings is up for grabs every time they mail me a checkbook.

Mark this under "brilliant ideas"

[spartacus_prime]

I want whatever those guys were smoking when they thought this was fraud-proof.

Re:Mark this under "brilliant ideas"

[zonky]

What makes you think they were concerned with being "Fraud Proof' More likely they were out to get their cut of the people who never look at their bank statements.

Just like the Feds

[moxley]

This is just like the federal government - get rid of one of the symptoms instead of the actual problem.