September 2004 Topics
Check 21, Dime-dropper, Expunge, Monroney Label, and Vu Camprá
 

Will fraud losses increase when banks eliminate paper checks this year?
 

Fraud In Other Words: Professional Jargon and Uncensored Street Slang
By Larry C. Adams, CFE, CPA, CIA, CISA
 

Check 21
The “Check Clearing for the 21^st Century Act” takes effect on October 28, 2004. Check 21 allows banks to truncate all check deposits by converting paper checks into computer files of the check images for electronic check presentment (ECP). ECP files post at least a day earlier than paper check processing, so the “check float” is reduced. France, Germany, the United Kingdom, Hong Kong, and Singapore recently converted to truncation. The United States is the last industrialized country to adopt inter-bank check truncation. Check 21 authorizes a new legal document known as a “substitute check”, also called an “image replacement document” (IRD). A substitute check can be printed if necessary, when a paying bank insists on processing paper or when a check writer needs proof of payment. A substitute check contains images of the front and back of the original, along with the endorsements, signatures, and magnetic ink character recognition line (MICR line). A memo line explains “This is a substitute check. You may use it the same as you would the original check.” The American Bankers Association estimates “check fraud attempts” against commercial banks totaled $4.3 billion in 2001, but “actual bank losses from check frauds” totaled $700 million. Banks might incur higher fraud losses using Check 21, for example, when a customer claims he did not write a check and a handwriting expert can’t make a proper determination from a substitute check. Substitute checks will be unable to capture physical security features such as holograms, ultra-violet inks, barcodes, digital watermarks, and void pantographs. Processing speed is the primary fraud-fighting tool offered by Check 21. Corporations can continue to use “positive pay services,” that electronically match the serial numbers and amounts of the checks received by the bank for payment to the corporation files of checks issued. Three optional fraud deterrents are automated signature verifications systems, self-authenticated negotiable documents (SAND) that “lock in” payment information on the checks, and secure seals that place a special code on checks that must be decoded by the paying bank.
“Check 21: From Paper to Imaging,” supplement to U.S. Banker, May 2004.
 

Dime-dropper
A tipster who drops ten cents into a pay phone to speak with the news media about corruption, internal investigations, politically-motivated surveillance, alterations of crime scenes, or other police misconduct. The price of pay phone calls has risen significantly since the 1980s and cell phones are now more common than pay phones, but the term dime-dropper is still used today. Sometimes it refers to someone who drops a dime on a sidewalk to signal the police to move in for an arrest. Dime-dropper also is a term for an anonymous informant who uses a public telephone to contact the police, or a police informant who was once a drug addict.
Jay Robert Nash, “Dictionary of Crime: Criminal Justice, Criminology, & Law Enforcement,” Paragon House, New York, 1992, page 102.
 

Expunge
To erase, blot out, obliterate or cross out. To cause something to be forgotten. To mark a point next to unwanted text that is to be deleted from a written record, report or book. Derogatory comments, profane language, and pornography are expunged from the Congressional Record, as well as remarks that violate other rules. To destroy all traces of something. A brokerage house might expunge an order, a cancelled transaction, or a record of a customer’s interest in buying or selling stock. To physically destroy information in files and computers. To seal something from public view. State law may allow criminal records of a juvenile offender to be expunged when he reaches the age of majority (18), to allow him to begin his adult life with a clean record. To remove a name from a list. When a soldier retired from military service in Old Rome, the records were marked with a series of dots or points pricked over or under his name. Expungere is a Latin term meaning to prick out or puncture.
Bloomberg Financial Glossary, www.bloomberg.com/
analysis/glossary/bfglose.htm, May 30, 2004.
 

Monroney Label
(Monroney Sticker, Window Sticker)
The information label that manufacturers and importers of new vehicles are required to stick to the windshield or side window of cars. The Automobile Information Disclosure Act of 1958 (AIDA) is commonly known as the Monroney Law or the Price Sticker Act. Senator Almer Stillwell “Mike” Monroney of Oklahoma was the chief sponsor. The law’s provisions are detailed in the United States Code, Title 15, Chapter 28, Sections 1231-1233. The act was intended to deter fraud by deceptive car salesmen. A consumer can use the label to double-check equipment, price, and performance claims made by a salesman. Today, a Monroney label discloses the vehicle’s identification number (VIN), make, model, final assembly point, the name and location of the dealer, delivery transportation methods and prices, the Manufacturer’s Suggested Retail Price (MSRP) of the base vehicle, the prices of manufacturer-installed optional equipment, and Environmental Protection Agency (EPA) mileage estimates. Willful alteration or removal of the Monroney label prior to the sale to the consumer is subject to a fine of $100,000 for individuals or $200,000 for organizations. Each violation also may be punishable by one-year imprisonment. If the window sticker is missing, a copy of the Monroney label is included on the manufacturer’s invoice to the dealer.
“Monroney Sticker History,” http://autopedia.com/
html/monroneysticker.html, April 18, 2004.
 

Vu Cumprá
Street peddlers in Italy who are migrant workers from Africa. Vu cumprá fail to obtain sales permits and often sell counterfeit merchandise, everything from sunglasses to African iron sculptures. Vu cumprá translates into “Wanna buy?”
“About the Vu Camprá,” www.lanzani.com/uk-vucumpra.html, July 21, 1988.
Photo: www.barganews.com

 

ã Copyright 2004 Larry C. Adams.
All rights reserved.
 

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