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Adopt more stringent cautions to ‘online check’ payments

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Heads up: A new "online check" service makes it easier to forge checks and, as a result, the FDIC has issued a warning.
The details: Businesses and banks have reported receiving fraudulent checks issued via, a subsidiary of a payment-data service in California. Qchex is an online service that creates checks for people if they provide an account number, a routing number and a valid e-mail address. The checks are then sent electronically by e-mail (where the recipient can print them) or a paper version can be created and sent by mail.

But because Qchex doesn't verify the account holder's identity, some payments turn out to be bogus.

The fraudulent checks may look real, bearing actual routing numbers assigned to the drawer bank, along with either actual or fictitious account numbers. Some checks created via Qchex also run the risk of the account holder being a victim of identity theft, making the check's validity even harder to discover.

Bottom line: Because of the high risk of fraud, don't accept payments from online checks for now.

Other third-party payment services—such as PayPal, Payments, or Yahoo! PayDirect—also carry risks, but they're a much better option than checks.

Here are three other ways to reduce your risk with such payments:

1. Check up on the payment service with TRUSTe ( or the Better Business Bureau (

2. Don't respond to e-mail messages from any service (such as PayPal) that asks you to update or confirm your account details. These are likely to be phishing scams. (See

3. Use extra caution if the merchandise your selling is expensive.

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