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A case of old-fashioned identity theft

Dear Thea,

We are a small supply house—just two locations. We have been the victim of identity theft. Our checks are being intercepted prior to reaching us. Our customers who have been affected by this are upset with us. They claim they mailed the check, so it is our problem. We have explained to them that we didn’t receive it so there is nothing we can do, and our bank can’t assist since we never actually had possession of the check. Some customers are refusing to pay us or contact their bank to recover the money, even though I have explained it and their account still isn’t paid. We are working with the police and the postal inspector, but it is a slow process. It seems the laws and advantage are on the side of the criminal. The crooks have even gone so far as to open banking accounts in our name in different states, then run our intercepted checks through those accounts. Meanwhile, our company is getting negatively impacted, both financially and reputation-wise. How can I assure our customers that we are not the problem? How can I get us paid and protect us moving forward?

Signed, Hog tied in Hanover

LBM Resources

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Dear Hog tied,

Aren’t you the trendsetter?! In a world of increased cybercrime and dark web intrigue, yours is an old school, throwback case of identity theft. While that absolutely does not make you feel special, I am sure, it is somewhat fascinating to me.

From the details shared in your email, you are already working with the postal inspector and your local police and I am assuming they are keeping you up to date on their progress. My criminal mind and natural assumption would be that someone inside the postal operation has a hand in the light finger lifting of your checks since your customers have confirmed they mailed them and the checks did not make it to your mailbox.

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Let’s break this down a little further starting with your customers who are refusing to pay you and basically washing their hands of the situation. Sometimes you have to be cruel to be kind. You may start by reminding your customers that you have a valued partnership. And partners help each other. The cold hard fact is that their account has not been paid and you cannot continue to ship without either getting paid or getting their cooperation. Yes, this does pose a dilemma. Either continue to ship your unsympathetic and uncooperative customer, possibly eating the loss, or put your foot down and refuse to ship unless a bit of compassion and cooperation is forthcoming.

First things first—why, dear Hog Tied, are you still having checks sent to your address? Get yourself a lockbox. On-line payment portals are another solution that removes the post office from the equation (because let me just say it—are you really going to rely on the U.S. Postal Service to get your payments to you on time, or in your case, at all)? Remove as many opportunities for slippage between you and your payment as possible.

Since this was a little (who’s kidding who, this was really out there for me) outside of my knowledge base, it gave me a chance to reach out to a few industry buddies and hit them up for free advice with no recognition or even a free lunch. Luckily, they are not fame seekers and were intrigued by your story and wanted to help.

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From the banking perspective: You cannot file a claim with your bank or even your insurance since the check was never in your procession. Your customer has to file a claim with their bank to be investigated. The customer’s bank may require a police report to be included in your customers submittal plus any additional information you have. Once the investigation is complete and they have determined it is legit, they will refund their customer’s money and then your customer can pay you. As the saying goes, if at first you don’t succeed, try, try again in the event they deny it.

As the process was explained to me by a fabulous banking guru (thank you Amy), it is an incredibly tedious process. But that is what you are dealing with.

The attorney advice was much more direct: consider suing the post office. Yep, you read that correctly. File suit against the United States Postal Service. He then added that this would not be easy, possibly a long shot, definitely expensive, and would most likely drag out for what would be longer than your tenure as a credit manager. But, he added, wouldn’t it be an amazing case to bring forward?! I am assuming that is lawyer humor.

The best advice on how to deal with you customers, bank account and reputation is a multi-prong approach: offer payment options that take the post office out of the picture; work with your bank on the situation, keep them informed and leveraging your relationship for help; work with your customers, walk them through the process and most importantly; vigilantly stay on top of each and every missed payment.  Another reason to call your customers early and often. Identify any issue as soon as possible and start dealing with it.

To sum it up, you are going to have to take the lead in the situation if you want to bring home the bacon (oh come on, there is only so much wit in pig tales).


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