Payroll check fraud increases as economy worsens

On January 23rd a brazen thief was photographed leaving a Charlotte County, Florida, Wal-Mart after cashing a bogus payroll check. Here's the story from local radio station WINKnews.com:

CHARLOTTE COUNTY, Fla. - Charlotte County Sheriff's detectives are asking the public's help in identifying a suspect in a Wal-Mart surveillance photo in Murdock who cashed a $1,475 payroll check that turned out to be fraudulent. The incident happened Dec. 31, 2008 and the case remains unsolved.

Detectives said the suspect provided a payroll check made payable to a Timothy Lamar Trayhan of Palmetto, Florida, and he used a Charlotte, North Carolina, driver's license with photo to cash the check.

Detectives learned that the Wal-Mart on Cortez Rd. in Bradenton had also cashed six payroll checks from five different companies drawn on three different banks, and payable to six different people. All of the checks had the same routing and account numbers.

Those companies lost thousands of dollars, and may face even more losses if the criminals move to another town and cash more bad checks.

A quick way to cut payroll fraud risk is to implement a paycard program. Directo paycards make it easy to eliminate paper payroll checks, reducing fraud while streamlining payroll delivery.

Read more about payroll check fraud in an article Directo President and CEO Bob Howe wrote in Construction Magazine.

More people using Debit Cards for tax refunds

According to a recent article in the Washington Post:

"In the past, taxpayers anticipating a refund had three ways to get their hands on their money. They could wait six to eight weeks for a government check to arrive in the mail. They could have the refund automatically deposited in their bank account, which takes about two weeks. Or they could pay high interest fees for a so-called refund-anticipation loan and get their money immediately.

Now several tax-preparation firms are offering a fourth alternative -- plastic. "

For millions of people considered to be 'unbanked' in America, this is a viable option to receive their refunds quicker, safer and more economically.

Directo cards have long been used for this purpose. We encourage our customers, banking partners and payroll partners to encourage individuals to take advantage of this safe and speedy pipeline to their cash.

Not only is this a great idea, but should the government issue another stimulus check, those individuals with a Directo like card product may receive their funds quicker.

Heartland responds to the news of the widespread security breach

When we posted yesterday, Heartland had not issued a press release, and other than a brief statement from their president, no comment, either. Today, they have established a website that so far contains only their press release. If you can't follow the link, it's www.2008breach.com. Below the press release is a Questions and Answers link.

Check your bank statement!

The latest payment processing security breach underscores the importance of protecting your identity and staying alert to your account activity.

You probably know exactly when your direct deposit is due to hit your account, but do you know when electronic payments are scheduled? Now is the time to use online banking products that provide instant access to transaction activity. Fiscally responsible consumers keep close watch on their accounts to monitor activity and validate transactions. Directo provides 24/7 real time account information access, as well as monthly account statements. Keeping track of transactions makes you aware when anything unusual appears, allowing you to react quickly.

Protecting your identity

Keep your PIN secret, check your account often, and shred any documents that contain name, address, date of birth, and above all, social security number. While the growing sophistication of thieves means that there is no guarantee that you will always be safe from identity theft, precautions that you take, as well as your bank’s safeguards, will ensure that any attempt will be thwarted before it can do major harm. Keep safe!

Payday loan use growing among middle class families

As the country's economic news worsens, a natural side-effect of job losses and financial uncertainty is the increase in people looking for small loans to pay bills and handle emergency repairs. The Atlanta Journal-Constitution reprinted an article last week from the Los Angeles Times about the booming business of payday loans and its growing popularity with the middle class. Many families live without a financial cushion, and borrowing $300 for a $45 payday lender's fee seems reasonable when faced with having the lights or heat turned off in their homes.

Good money management
One of Directo's goals is to make every cardholder a savvy consumer. We email monthly newsletters full of money-saving tips to all of our clients to share with their employees, and counsel cardholders on the best ways to handle their accounts. An alternative for those looking for immediate access to extra funds for a short period of time is the ability to overdraw their accounts with overdraft protection for a much lower fee than a payday lender's.

Directo paycard accounts are portable, so it's not just the card their employer gave them at this job - it's an account for life. Directo paycard customers know that they don't have to carry all of their cash with them, that it's safe in their account, and soon discover that it's easier to save when their money is in the bank. And those savings might just keep them away from the payday lender.