Fraud has been perpetrated upon employers by confidential clerks making false entries in a bank pass-book, or by keeping a spurious pass-book for the eye of their employers. It is fully within the range of an observant officer's power for the safeguarding of the bank and the protection of its clients to detect embezzlement attempted by such methods. If an account, operated under a power of attorney, or by one particular employee, is frequently overdrawn, or if anything of a questionable nature occurs in the working of the account, the circumstances should be discreetly brought to the notice of the principal by the manager.
As the teller comes more into contact with the public than any other officer he has exceptional opportunities for observing things which may be of great use to the manager. He should train himself to observe every circumstance connected with each trans-action, and especially with any unusual occurrence. Any attempt at "kiting" by means of checks should be reported at once to the manager, who will deal with it as he may consider advisable. This applies also to accommodation checks, indeed, to anything unusual or irregular.
Checks are accepted by the ledger-keeper only after they have been charged to the account on which they are drawn. Checks should not be marked "good" by the manager or any other officer unless previously debited to the proper account, or be crossed "Negotiable at par" thru another branch until accepted.
No check should be charged to an account unless there are funds at credit to meet it, without the authorization of the manager signified by his initials on the check. A check which has been altered or erased in any vital part should be refused. Any blank space in the amount should be distinctly filled in or the customer's attention called to it. In accepting a check which has been carelessly filled in the ledger-keeper should write across the face of the check the amount for which he has accepted it, so that it cannot be "raised" or changed to a larger amount.
In the case of a check for which there are funds being returned for some informality in the indorsement, it should be "accepted" before being sent back for correction.
No overdraft should be allowed without the permission of the manager expressed in writing at the head of the account or by his initials on the checks.
Tellers are generally forbidden to cash or receive on deposit unaccepted checks on any bank, or any drafts or other items unless they have been initialed by the manager. In special cases, where the manager deems it necessary, he may give the tellers written authorization to accept from certain customers checks, drafts and items to a specified limit. This is only done, however, when the undoubted responsibility of the customers justifies this action.
The possibility of being victimized by confidential clerks or other employes of the bank's customers by means of forged or raised checks should always be borne in mind. A check for an appreciably larger sum than is customary, for which cash is demanded in payment, is in itself significant and should excite suspicion. A check drawn payable to the customer of another bank should, in the ordinary course of business, be presented thru the other bank, and such a check, even if payable to bearer, presented over the counter for cash should carry suspicion on its face and suggest inquiry.
It should always be borne in mind by the teller that accepted checks, bank drafts, express orders and circular letters of credit are also all liable to forgery and alteration; payments made on the latter, especially to strangers, should be limited to a reasonable amount for traveling requirements. If they call for a large amount great care should be exercised.
Checks payable to corporations or wholesale firms should not be paid over the counter of the bank to an employe without express authority of the company or firm.
Checks should not be cashed for strangers until they have been satisfactorily identified: even then, there is not, as a rule, much profit to a bank in the transaction.
No identification is safe or satisfactory excepting the attendance at the bank of a well-known and responsible person, who indorses the check or other instrument in the presence of an officer of the bank. Any other ostensible identification or indorsement may be fraudulent. A person who forges the signature to a check, or raises the amount of a draft, or steals any negotiable instrument, might be presumed also to forge a letter of identification or an indorsement, to serve the purpose of identification. The safest course is always to give the bank the benefit of the doubt.
A written identification which purports to be that of a hotel-keeper or hotel clerk is especially open to suspicion.
Every check for a large sum should be particularly scrutinized, and the attention of the manager called to it.
Customers or others who are unable to write and who sign by mark on checks or other documents, should be identified to the satisfaction of the teller, but in no case should the teller witness the mark, which should be attested by an independent witness, not an officer of the bank.
The rules to be observed with respect to the current account ledger are applicable to the savings bank ledger, with the following exceptions:
The manager should take charge of and keep under lock and key all blank savings bank pass-books, and issue them to the ledger-keeper in unnumbered lots of one or two dozen, as he may think best, keeping a record thereof and verifying them according to the new numbers when checking the ledger entries with the supplementary cash book. Should it be necessary to issue a new book in continuation of an old account the ledger-keeper should then and there draw the manager's or accountant's attention thereto. By this method it is intended that the manager should personally know that no deposit is received for a new account without a corresponding credit to the ledger.
The savings bank pass-book should be presented when withdrawals are desired so that the entry can be made in the book itself. Whenever it is necessary to make an exception to this rule there should be no question as to the depositor's identity, and the manager should initial the check, making note of any particulars, especially the name and address of any outside party called in for identification.
When a savings bank account is closed the passbook should be returned and written up in full with a heavy line ruled across the page under the last entry, and filed away by the ledger-keeper in a box provided for the purpose.