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Qchex and Neovi Inc. Shutdown by FTC: FINALLY

Posted on Oct 2, 2006 by Tom Fragala

I’ve been warning people about Qchex for years! Way back when I was blogging at scamsafe.com, and more recent in August here on this blog! Finally the someone takes action—way to go FTC. Every American is safer today, believe me. I still remember the reaction of police and bank fraud investigators I asked about Qchex (fear and foreboding). Qchex was tailor made for criminals, plain and simple. If I was a criminal and you had given me one method to steal, I would have picked Qchex. It’s that rotten.

Qchex, an Internet-based check creation and delivery service, has agreed to a temporary restraining order to halt its unfair business practices. In a complaint filed in U.S. District Court, the Federal Trade Commission charged that Qchex creates and sends checks drawn on any bank account identified by a Qchex customer without verifying that the customer has authority to write checks drawn on that account. As a result, con artists have used the Qchex service to draw checks on bank accounts that belong to others. According to the FTC, Qchex’s practices have harmed both innocent account holders whose bank accounts have been debited, and individuals and businesses who received fraudulent Qchex checks as payment for goods and services. The agency alleges the practices violate federal law, and has asked the court to order a permanent halt to the illegal operation, and to order the defendants to give up their ill-gotten gains.

Read the complete FTC press release “Court Halts Illegal Operations of Online Check Processing Firm” and the full complaint is here.

Update: The Qchex.com web site is still there. They have a message up that says “Due to maintenance, Qchex.com will suspend service until further notice.” Maintenance? I love it! Nice try, Qchex. Try “Federal Court Order” instead.

Update 2: Watch out. These dirtbags are linking to an alternative site, (check-writing-software-review.toptenreviews.com) which my Trend Micro software says is SPYWARE. FTC, please do something about this. It may be in violation of the temporary restraining order section IIIc.

Update 3: Two of the corporate addresses for Qchex/Neovi listed in the FTC complaint (page 8) are bogus. I assume the FTC investigators already know this. One of the addresses does not exist (according to all the online mapping services). Another corporate address listed is—get this—the San Diego Zoo. Reminds me of the Blues Brothers (Elwood’s driver’s license address was Wrigley Field).

Update 4: Qchex is still dangerous. They have a database with probably hundreds of thousands of checking account numbers. If you suspect Qchex might have the account number of your checking account, close the account immediately.