Fraudulent Checks Drain North Texan's Bank Account

Two business partners in Dallas say their bank account was drained and they didn’t catch the fraudulent activity until it was too late.

Jeffrey Gladden and Karen Cummings are divorced, but they’ve come together to handle some unfinished business. They owned a small business and opened an account with Community Bank, which is now Northstar.

“The checking account had accumulated a little over $28,000,” said Gladden.               

They decided not to touch the funds and figured the money would be safe.
But on May 8, Gladden said he got a phone call from the bank.

“It wasn't an urgent phone call," recalled Gladden. "I was scanning it to see if there was anything but there wasn't anything urgent about it. So, I go, 'ok, I’ll get to that.'”

He went to the bank two weeks later to check things out. That's when he learned that the account had been drained. There were five fraudulent checks written on their account, totaling nearly $27,000.

“A signature card is basically the bank's way of recording the authorized signatures that can actually sign a check to make it a valid check for transaction,” said Cummings. “These signatures on these checks don't match up with these at all.”

They thought Northstar bank would restore the funds due to obvious the fraudulent activity. But they were wrong.

“We get a letter from their attorney basically saying we have no liability, said Gladden. "You didn't pick it up within 60 days. It's your responsibility."

It’s a policy that is not unusual.

The account terms and conditions states if the customer “fails to report any unauthorized signatures, alterations, or forgeries in the account within days of when we first send or make the statement available, you cannot assert a claim against us.”

“It's like, really? Somebody can walk in here with forged checks, forged signatures, walk out the door with the money and you have no liability,” Gladden said. “They don't have any systems in place to actually detect whether false checks are being submitted for payment.”

NBC 5 Responds reached out to Northstar bank to find out how this type of activity is possible.

"I’m sure you're aware that we can't release customer information but rest assured, we take every account seriously and review any issues that may arise with our customers," a spokesman told NBC 5 Responds.

Cummings and Gladden filed a police report and Northstar said it's eager to work with authorities.

As for the $27,000: The customer bears the loss.

Let this be a reminder to everyone out there with a bank account:
• Check your account at least once a week. Technology has made it easier than ever to do so.
• Also, check the fine print before signing on the dotted line. Read through the terms and conditions of the account to see if the bank will recover your funds in a situation like this.
• If you do spot fraudulent activity, notify your bank immediately. The sooner the better.

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