Just 10 days after installing a system to detect check fraud, First Alabama Bank got a big surprise. The Birmingham-based bank discovered well over $250,000 in check-kiting schemes in the works. Fortunately, First Alabama found the fraud early enough to avoid any losses.
Still, the amount of the potential fraud was jarring. First Alabama had assumed effective safeguards against check kiting were already in place even before the new system was up and running.