Monitor your bank accounts for fraud: Wiley

Wiley wants our electoral law clients to be aware of a terrible trend we are seeing. There have recently been a series of fraudulent withdrawals from Political Action Committee (PAC) bank accounts, which were only uncovered during a bank reconciliation and the preparation of your report to be filed with the Electoral Commission Federal (FEC). PAC fraud was common several years ago, but seemed to be in remission until this year when, suddenly, customer after customer fell victim to PAC fraud. For the lucky ones, those who have already set up Positive Pay, the fraud was detected before the check was cashed or the ACH withdrawal was made. But, for those who do not have a positive payout, checks are cleared and large sums of money have been drawn from PACs’ bank accounts, leaving behind a reporting nightmare and forcing PACs to go through the process. recovery of money from banks. Fortunately, banks have generally been cooperative, returning fraudulently cashed checks or ACH transactions, but no PAC wants to go through this headache.

How can you prevent this from happening? As mentioned above, Positive Pay really makes a difference. So what is Positive Pay?

It depends on the bank, but the main thing is that it is intended to detect and prevent fraud. As the fraud was not limited to one bank, we saw several versions of Positive Pay, depending on the bank involved.

In one version, the PAC informs the bank in advance of the checks it has issued, the payee and the amount. The bank then compares the checks presented to it for payment with those that the PAC has identified as issued, and if they do not match, the bank sends you a copy of the checks and asks you to confirm that they should be cashed. In another version, the bank asks the PAC to confirm any check presented to the bank for payment. If the PAC does not confirm, the check is not cashed.

In yet another third version, the bank cashes the check and then confirms with the PAC that the check was intended to be cashed. Unfortunately, this third version does not help the PAC because once the funds have been disbursed, they must be reported on the PAC’s FEC reports. Unfortunately, the fraud was not limited to fraudulent checks. ACH transactions have also been targeted by fraudsters! You can also set up ACH Positive Pay with banks – and you should.

What if you don’t have Positive Pay? First and foremost, get it! And even if you get it, it’s a good idea to change your bank account numbers for future checks and electronic transactions. If you don’t already have Positive Pay in place, check your bank statements daily if possible to uncover fraud in a timely manner, especially now that you’re sending out those last-minute checks to applicants.

Although we have not been able to trace the source of the fraud, we do know that some of our clients have cut up candidates’ checks and mailed them, only to find that the checks never reached their destination. If your PAC has been the victim of fraud, Wiley is here to help you report transactions correctly, walk you through the process, and avoid legal action from the FEC!