.:Computer Defense:.

An article from the NY Times entitled, 'Scanning Your Money to the Bank' recently came to my attention. The gist of the article is as follows: There's an Act (Check Clearing for The 21st Century) that allows for the exchange of electronic images of checks rather than the physical checks... Numerous banks and big business are already doing this, and one bank, which serves the US Military, has also implemented this.  A company called Fiserv has recently announced that they have a way to bring this ability to online banking customers. I find this to be very, very frightening...

Someone can submit an image of one of my checks and they will get the money for it? It seems to me like we're making check fraud easier... The company claims that the software will detect if the image has been modified, but I'm guessing it won't be perfect... a lot of digital edits are difficult to detect, especially when done by pros.. and I'm betting even more so when done by pros who stand to make some money.

Let's say that someone has been out mailbox fishing and they've collected a check that I've sent to the utilities company for $250.00. They have an account with the same bank (or have stolen blank checks from the same bank)... They write their name in the Payee field and scan it. They now select a perfect square around the Payee field and cut it, pasting it into the scanned copy of my check. Since the checks are from the same bank, and are (for arguments sake) of the same style... the paste can be done flawlessly... no need to edit signatures, no need to modify names and make the edits look normal... it's nice and easy.

Now what if Pay Day loan companies start using this technology... they are already more lax than  your standard bank... what will be allowed to slip through and be cashed now.

Another example...  What happens if someone gets one of my checks and I put a stop payment on check #10 (the one I lost)... the criminal, before cashing the check, simply modifies the check number and payment proceeds.

There are definitely some things that should exist online... even related to banking... and email money transfers are a great example of this... but scanning checks... that seems slightly ridiculous to me. What happens if I give someone a check and they scan it over a network printer... or they store the check in a shared folder... or a worm browses their hard drive and uses OCR to recognize check images and forward them on? My check information (which includes my account information, full name, phone number and email address) now falls into the hands of someone who is malicious.

I've always thought that in this day and age, checks were an out-dated and antiquated method of handling monetary transactions...  This just makes it worse... and it's not something I'm looking forward to seeing made available to the mass market.