By Phillip Lee
It may seem likely that as times get tougher, the toughs turn to robbery. But experts say that appearances can deceive.
Although at least one insurance company reports an increase in the push-in type of robberies, the consensus among experts is that check cashers aren’t seeing a dramatic hike in thefts due to the economy — yet. But many warn that may change.
“We haven’t seen an uptick in the losses yet in the check cashing arena,” says Gary Wasserman, vice president of Florida-based Wexler Insurance Agency. He adds, however, that jewelry stores are being hit more often.
Wasserman suggests that the reputation people in the industry have for protecting what’s theirs discourages some robbers. The fact that unlike banks, check cashers put up their own money and have to insure it themselves means they’re going to be less willing to part with their funds.
“It’s their money,” Wasserman says. “You’re going to take a different approach to protecting your own asset. You’re also buying private insurance. And those insurance carriers are going to take a look depending on the quantum of coverage you’re looking for and they’ll put in place certain security recommendations and procedural recommendations to make sure you’re not an easy target.”
Wasserman says that while would-be robbers may not be thinking about check cashers’ personal stake or insurance requirements, they do know check cashing stores are generally well-secured. What’s more, in many areas it’s known that the operators are often armed, and robbers don’t want to get into a gun battle, he speculates.
Banks Look Better
Another reason that check cashers may not have yet been targeted is simply that they’re not banks.
“I think people tend to think of us as the neighborhood store front,” says Joe Coleman, president of RiteCheck in New York City. Criminals don’t see check cashers as having that much money and would rather try to rob banks, he suggests.
Unfortunately for Coleman, some people did realize his business has cash on hand, and one of his stores was robbed earlier this year in a push-in. (Suspects were later arrested and charged with the crime.)
“The most common way that check cashers get robbed are called push-ins at opening and closings,” Coleman says.
“So the moment that you’re opening a store, they come up from behind you with a gun and walk you in. They hold a gun, make sure the open the safe and they run. Take the money and run.”
Push-ins are a traditional headache for check cashers, according to Frank Maranto of the insurance firm Marshall & Sterling. But the pain has been getting worse recently, he says, as over the last two months his firm has faced 22 push-in type losses.
However, Maranto adds that types of thefts go in cycles; a couple of years ago, the biggest problem was burglaries.
Push-ins are tough to prevent, but there are steps every check casher should take. “You have to have more than one person opening, and they have to stand apart from each other,” Maranto says. He adds, though, that there are no guarantees: There have been successful push-ins when five persons have been opening.
Wasserman, too, stresses the importance of following security procedures at openings and closings because that’s when the operation is most vulnerable.
“You want to make sure there are other people that are able to watch you, maybe from a safe distance, to open and close and make sure it goes safely and there’s not somebody out there casing you,” Wasserman says.
Once in the store, the door should be locked and any chores that must be done in the lobby area taken care of before the clerk enters the cage, Maranto says.
Then, once the clerk is in the cage, the outside door should be opened using a remote device. The procedure should be reversed at closing time.
Familiarity Breeds Carelessness
These security measures are simple to follow, and most check cashers today are well aware of them. So why do push-ins still succeed?
It’s a matter of complacency, according to Maranto.
“People are lulled into a false sense of security,” he says. They’ve opened so many times without problems — perhaps for years — that they begin to think that a push-in can never happen to them. In fact, Maranto says, their turn can come at any time.
Check cashers are coming up with different ways to fight the familiarity-breeds-carelessness problem.
RiteCheck has beefed up its training program. It had a mentor training program in place, but has added a classroom element as well.
“We decided to develop a training program because it’s one thing to tell people what to do, it’s another thing for them to actually do it in training,” Coleman says. “We’ll run everybody through it.”
He adds that RiteCheck is doing security surveys and more frequent security audits.
The surveys are given to the employees and they are asked for their input on what ideas they may have to improve security.
The audits involved checking the security systems such as alarms and making sure that everyone knows the procedures and processes.
“If everybody had followed the procedures, we wouldn’t have had a problem,” Coleman says.
The company has added more cameras, and someone will be monitoring the opening and closing at each store.
RiteCheck also has a camera system that allows anyone to monitor a store through the Internet on any computer as long as they have the log in and password.
Wasserman agrees with Coleman that you have to have “processes, procedures and common sense.”
“A good employee who is trained well and is given proper advice on things to look out for and how to react and steps to follow, you’re always going to be better off,” Wasserman says.
He also suggests installing a good camera system with digital DVR recording.
“The better image you can get of a perpetrator, the more likely you are to catch that person and get him off the street,” Wasserman says.
Dishonest Employees Abound
Push-ins can also be connected to the age-old problem of dishonest employees, since an employee may help set up a theft.
Indeed, the most costly area of theft for check cashers is dishonest employees, no only in terms of complicity in robberies, but more commonly in embezzlement.
Pat Ballis, managing director of Meisrow Financial Insurance Services in Chicago, says his company has seen an increase in employee theft.
“It’s something that we’re seeing across the board, at the small, medium and large companies,” says Ballis.
He says the Internet camera system is a good security measure, but employers need to pay attention to the basics, such as taking a good look at their deposits and simply making sure that the books add up.
“Employee theft is always an issue and you always have to pay attention to it,” Wasserman says. “And it’s usually the most trusted employees that nail you.”
Maranto points out that dishonest employees are pretty smart. “If an employee wants to steal money from you, they will find a way,” he says. The best thing to do is to take steps to minimize the loss. Individual drawers are a preventative used by virtually all check cashing operations today, Maranto says. Something that can be stepped up is surprise audits; unannounced cash counts can uncover thefts before they reach dramatic levels.
Maranto adds that embezzlement can be hard to prove, because the employee involved can claim he simply made a stupid mistake.
Today, check cashers also have to be aware that people can hack into a check casher’s system and transfer money to different accounts.
Wasserman notes that the computer thievery has happened but infrequently.
“That takes a higher level of skill for a criminal to do that,” Wasserman says, adding that when it does happen, it’s probably an inside job.
“There are a lot more thugs out there than there are people who are sophisticated thieves looking to do it through electronic means. It’s much easier to go ahead and whack the armed guard as he’s walking out of the vehicle than it is to hack into a computer system,” he points out.
But both situations are real possibilities and devastating when they happen.
And there are more ways criminals are trying to get your money: Coleman says there’s been an increase in bad checks and counterfeiting.
Thefts May Increase
Will theft of all these different kinds increase if the economy gets worse, as many experts predict it will?
“We certainly do anticipate that’s going to happen, because of the economic climate,” Wasserman says. He adds that embezzlement may be a particular concern: as families are hit with layoffs, employees of check cashing operations may get desperate and start “fooling around with the money.”
Maranto points out that many thefts are perpetrated by members of the criminal community who are always out to rob someone, regardless of the state of the economy. Still, he says, “with the economy going down, people may have a credit crunch in their own lives.” And that may lead them to steal.
In any event, Wasserman stress the key is simply to be aware of what is going on around you.
Coleman agrees. “Everybody is looking to get extra money. We have to be much more vigilant in this economy.”