Remote Deposit Capture
Banks are beginning to offer a new service to their business
customers. Business customers at some banks can make their
deposits literally without leaving their places of
business. With acquisition of the proper technology and
bank approval, bank customers scan the checks to be
deposited into the equipment provided.
I Need Your Assistance...
You
have probably received an E-mail that begins with some
variation of the phrase, “I need your assistance…” It goes
on to explain that your assistance is needed in transferring
millions of dollars that is being wrongfully held, usually
in some African country.
Correspondent Bank Accounts
Recently BancInsure paid two large fidelity claims involving
correspondent bank accounts. One of the claims was in the
amount of nearly $850,000 and the other was approximately
$675,000. Without proper internal controls, employee
embezzlements can and will occur. These two claims vividly
point this out.
ATM Security
When an ATM is located in a somewhat remote location, you
might naturally be concerned about the security of the
machine and its contents. The lack of vehicular and foot
traffic, poor lighting in the neighborhood surrounding the
ATM and other factors are justifiable causes for concern.
Check Fraud
Check fraud continues to be a problem for the banking
industry. BancInsure, Inc. recently paid a claim that is
another example of the problem. Persons unknown were able
to counterfeit checks of a company that owned and managed
real estate properties.
Check Scams
Recently BancInsure has received several claims involving
altered checks. One of the claims involved a bank in a
small town in a southwestern state and serves as a good
example of how very cautious and careful bankers can get
“burned” by check scams.
Clearing, Settlement, Collection and Suspense Accounts
Clearing, settlement and suspense accounts are useful tools
for tracking items in transit, holding items for final
disposition and to aid in balancing accounts. The most
common of these types of accounts would be bank’s Federal
Reserve or correspondent bank accounts.
Early
Morning Robberies
Over the last couple of years BancInsure has paid four
large claims due to early morning robberies. The most
recent involved the robbery of a branch of a bank located
in a metropolitan area.
Fraudulent
Check Alert
Most of you are familiar with what is referred to as
“Nigerian Check Scams.” If you are not, it works like this.
How Long Is
Long Enough?
BancInsure recently paid a Financial Institution Bond claim
that illustrates the challenge of determining how long of a
hold should be placed on deposited items and perhaps that
even when the maximum hold is placed on a deposit it may not
long enough.
Long Term
Trusted Employee
The term “long term trusted employee” generally conjures up
a warm fuzzy feeling about the recipient of such praise.
Generally bank management, fellow employees, bank customers
and the community trust, admire and respect “long term
employees.”
Same Song,
Second Verse
A couple of years ago BancInsure paid a fidelity claim
involving the “head bookkeeper” for a bank. She was a long
time employee of the bank and was very knowledgeable of the
bank’s customers.
Serial
Bank Robber Strikes Again
Before you have visions of a robber walking in to a bank,
producing a weapon and robbing a teller or two, please keep
reading. BancInsure recently paid a large loss due to a
very sophisticated bank robber. The story goes like this.
Verifying Signatures May Not Be Enough
One of BancInsure’s insured banks recently incurred a loss
that highlights the growing problem of counterfeit checks.
The bank has a customer that is a medical center. Several
months ago the bank received a check for payment on the
medical center’s checking account in the amount of
approximately $110,000.
What Does An Altered Check Look Like?
Recently a banker that found out that sometimes an altered
check looks pretty much like any other check. He related
the story of how a customer had applied for a loan to
re-finance his automobile loan with another lender in a
different state.
Trust Department Errors and Omissions
Managing a customer’s wealth through a trust account can be
a rewarding experience, but during a volatile stock market
it also can be a perilous one. BancInsure has recently paid
a claim involving a trust company’s management of assets in
a couple’s IRA’s and trust accounts.
To Sell Or Not
To Sell
Investment decisions for trust department customers are
sometimes difficult. BancInsure recently handled a claim
that bears this out. The trust department of a bank located
in the Midwest was the trustee for an estate of a deceased
farmer.
Termination of Senior or Executive Officers
Sometimes it becomes necessary for a bank to terminate an
executive officer. This can be a difficult time for
everyone including the officer involved, the other directors
and officers, and the bank’s customers; however, it also can
be a very expensive.
Nuisance Lawsuits
As most of us are all too aware, nuisance lawsuits continue
to be a fact of life. While tort reform is making headway
in some states, it is far from universal.
Lender
Liability Suits Can Be Costly
Two entrepreneurs decided to start a business marketing
products that had become very popular with teenagers. One
of the entrepreneurs was a well-known and popular local
retired sports figure.
Employment Claims
A female bank employee was a new accounts clerk/customer
representative at one of the bank’s branches. She claimed
that she was being sexually harassed by the branch manager.
Construction
Lending: Treasure Trove or 'Boon Doggle'?
Real estate construction lending can be a valuable service
for bank customers, a good source of revenue to the bank and
contribute to the community’s development efforts.
'...,
But I Did Not Do Anything Wrong'
As noted in some prior BancGuard Communiqué articles,
sometimes you can do everything right and still get sued.
Banker's
Errors and Omission Coverage (1)
As you are well aware, banking is a very complex business
and becoming more so every day. The complexities of the
business can and do lead to occasional errors or omissions
by bank officers or employees.
Banker's Errors and Omission Coverage (2)
Given the volume and complexity of the some of the business
transactions that banks and bankers are involved with,
invariably mistakes will occasionally happen.
Banker's Errors and Omission Coverate (3)
One of BancInsure’s insured banks recently discovered that
there should be a limit to how accommodating a bank should
be in dealing with a customer who apparently has cash flow
problems.
