how did banks clear checks and get funds from other banks before computerization?
In: 6540
One of the fun scams criminals would do as they switched over to computers was to muck with fake checks. They’d make checks with a printed number for a big bank that used computers and use magnetic ink for a small bank that was behind the times. So the fed’s computer would read the magnetic ink, send it to the small bank. They’d read the nonmagnetic ink by hand, figure it was a mistake and send it to the big bank. Big bank would read it by computer and send it back to the small bank.
Eventually somebody would notice the darn thing was getting worn out by being sent back and forth and the jig would be up.
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