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Check fraud and forgery are two of the biggest security problems faced by banks. In fact, according to a recent Ernst & Young study reported by the National Check Fraud Center, over 500 million checks are forged annually, with losses totaling more than $12 billion, not counting those incurred by other types of document forgery. Check fraud law is governed by Articles 3 and 4 of the Uniform Commercial Code (UCC). As a result, check fraud law has moved toward reflecting contemporary banking practices. This memorandum generally addresses check fraud litigation resulting from: (i) alterations to the check, (ii) forgeries of the maker's signature on either the face of the check or the payee's endorsement on the back of the check, or (iii) counterfeit checks created by a dishonest third party. If there is a policy implicit in the UCC's rules for allocation of losses due to fraud, it surely is that the loss be placed on the party in the best position to prevent it. The revisions to the law will likely result in three significant changes to the causes of action available in check fraud litigation. First, they may provide a new cause of action for contribution based solely on shared culpability. Second, they may expand conversion as a cause of action in check fraud cases. Third, they allow a drawee bank to recover from upstream banks for encoding errors that may result in shifting liability in some counterfeit check cases. Check Fraud Law Before addressing the law, it is important to know the relationships between parties typically involved in check fraud litigations. A customer is a person with an account at a bank. A drawer or maker is a person writing a check and is typically a customer of the drawee bank. A drawee is a party, typically a bank, required to pay out money when a check or draft is presented. A payee is the party entitled, by the creation of the check by the drawer, to receive funds from the payor bank, usually the drawee. Presentment is the

Skechers USA has agreed to settle charges by the Federal Trade Commission for USD 40 million due to its claims that Shape-up shoes could help people tone muscles and lose weight. However, state and federal officials discovered that Shape-ups and other Skechers' toning shoes are not living up to all the marketing hype.   "Skechers' unfounded claims went beyond stronger and more toned muscles.  The company even made claims about weight loss and cardiovascular health," said the director of the FTC's Bureau of Consumer Protection.   According to Norton Scientific Reviews report, aside from the Shape-ups line, Skechers have also made deceptive claims on its Tone-ups, Toners and Resistance Runner shoes.   The shape-up ads declaring that the shoes are made to tone muscles and promote weight loss, claims that the FTC says are unsupported. FTC further alleges that Skechers cherry-picked results from the study that they cited and also failed to substantiate anything.   Skechers were defiant, however, and strongly denied the charges. According to them, they only agreed to the settlement in order to avoid "exorbitant cost and endless distraction of several years spent defending multiple lawsuits in multiple courts across the country".   Its president Michael Greenberg said, "The Company has received overwhelmingly enthusiastic feedback from literally thousands of customers who have tried our toning shoes for themselves and have written unsolicited testimonials about their positive experiences."   However, instead of defending itself against the lawsuit, Skechers opted for a settlement, which also means that it could avoid admitting anything. On Wednesday, it has agreed to settle the USD 50 million false advertising charges by the FTC and the lawyers of 44 states. Also included in the settlement is the barring of Skechers from misrepresenting any studies, research or studies related to toning shoes.   This settlement marks the FTC's continuous efforts

A group of hackers who call themselves the Lords of  Dharmaraja, (and is associated with Anonymous) have published the source code of Symantec, a digital security firm know for the Norton antivirus program and pcAnywhere, raising concerns that others could exploit the security holes and try to control the users computer.   The release of the source code came after the 'extortion' attempt failed as Symantec did not comply with their numerous deadlines.   Negotiations through email messages between a representative of the hacker group, YamaTough, and someone from Symantec were also released online. The exchange of messages are about Symantec's offer to pay USD 50,000 for the hackers to stop disclosing the source code and announce to the public that the whole Symantec hack was a fake, which made them a subject of mockery for appearing to buy protection.   Both sides admitted that their participation was just a trick.   The hackers denied any extortion aim, saying that they never intended to take the money and were going to publish the source code whatever happens; they simply want to humiliate them so they played along. While Symantec said that they are not actually the one in communication with the hacker, but a law enforcement agent.   The long negotiation worked to the favor of Symantec as they have been able to come up with patches to their Norton and pcAnywhere programs. Symantec has advised their users to stop using the softwares in the meantime until they have issued more patches for them.   Symantec released a statement saying that they have always been prepared for the leak of the source code so they've made and distributed hotfixes on January to secure their users.   The drawn-out negotiation is an obvious sign of a law enforcer on the other line. Delaying tactics is one of their assets to obtain insight into the enemy. More importantly, it will create more transactions where paper trail will be left along the way - utilizing persons wh

Norton Scientific Reviews: Scammers' Valentine Treat A global security company issued a scam warning against spam messages with catchy subject lines for Internet users this Valentine's season. Users must be extra careful in opening messages in their email accounts especially during the holidays as they can receive spam mails meant to get their attention and steal their personal data. One such scam warning issued by an antivirus company describes email messages that invites users to buy a gift for his/her loved one for Valentine's using an attached discount coupon from Groupon. Even though the proliferation of coupon services is not totally an illegal method, their popularity comes with the risk of being used in phishing attacks. Phishing can be done by sending a massive amount of email messages asking people to enter their details on a bogus website - one that looks very similar to the popular auction sites, social networking sites and online payment sites. They are designed to obtain personal details like passwords, credit card information, etc..... Norton Scientific Reviews: Symantec source code leaked by hackers A group of hackers who call themselves the Lords of Dharmaraja, (and is associated with Anonymous) have published the source code of Symantec, a digital security firm know for the Norton antivirus program and pcAnywhere, raising concerns that others could exploit the security holes and try to control the users computer. The release of the source code came after the 'extortion' attempt failed as Symantec did not comply with their numerous deadlines. Negotiations through email messages between a representative of the hacker group, YamaTough, and someone from Symantec were also released online. The exchange of messages are about Symantec's offer to pay USD 50,000 for the hackers to stop disclosing the source code and announce to the public that the whole Symantec hack was a fake, which made them a subject of mockery

A global security company issued a scam warning against spam messages with catchy subject lines for Internet users this Valentine's season. Users must be extra careful in opening messages in their email accounts especially during the holidays as they can receive spam mails meant to get their attention and steal their personal data. One such scam warning issued by an antivirus company describes email messages that invites users to buy a gift for his/her loved one for Valentine's using an attached discount coupon from Groupon. Even though the proliferation of coupon services is not totally an illegal method, their popularity comes with the risk of being used in phishing attacks. Phishing can be done by sending a massive amount of email messages asking people to enter their details on a bogus website - one that looks very similar to the popular auction sites, social networking sites and online payment sites. They are designed to obtain personal details like passwords, credit card information, etc.....