Prevent Check Fraud with Technology

Stay one step ahead of the criminals by understanding check fraud and the fraud prevention technology available today. Your organization’s bottom line can be negatively impacted by this still prevalent crime.

The Liability of Fraudulent Checks

Check fraud is on the rise even though check volume is declining. Checks remain the most vulnerable payment mechanism targeted by fraudsters. The reality is that without preventive measures in place to deter criminals, your firm is extremely susceptible to check fraud.

Am I Personally at Risk?

Recent changes in the Uniform Commercial Code (UCC) have placed the burden on the party who is most negligent in the process. This could be you. Historically, financial institutions were on the hook when criminals took advantage of an unsuspecting business. This is no longer the case.

Losses Are Substantial

The Association of Certified Fraud Examiners estimates that organizations in the US lose about 7% of their revenue to fraud. The American Bankers Association and FBI have estimated between 5.5 and 13 billion dollars are lost yearly due to check fraud.shutterstock_268150262

Three ways criminals use checks fraudulently:

  1. Lost, stolen, or counterfeit employee paychecks
  2. Counterfeit checks showing one company’s MICR line with another company’s name
  3. Payee name is altered on the issued checks

Fraud Prevention Measures

  1. Implementing preventative measures will significantly reduce your firm’s liability related to these crimes. Here are some safeguards you can put in place to limit your exposure:
    Eliminate preprinted check stock. It’s easy for criminals and employees to take checks without notice when several different checks with preprinted information are lying around.

    • Purchase software to print checks on blank check stock from your computer.
    • Use a single type of check stock to print checks from different bank accounts on behalf of multiple clients.
  2. Add security features to your checks. Security features empower the payee to verify that their check has not been tampered with.
    • Heat sensitive ink that will cause a symbol to fade then reappear when you rub between two fingers
    • A microprint border that, when photocopied, will appear as an obvious broken line
    • Chemical reactive paper that will appear to be stained if a chemical alteration is attempted
    • Watermarks that cannot be photocopied
  3. Close the payment loop. Standard Positive Pay and the new Payee Positive Pay electronically send your bank the information that should be on the check they are cashing. If the dollar amount, payee name, date, check number, or routing code are changed the bank will refuse payment.
  4. Implement the proper internal controls. Set up the appropriate structure in your organization to ensure that the correct people in firm have approved payments when they are made.

Technology to Prevent Check Fraud

When you realize what is at stake, taking action becomes a necessity. Fortunately there are solutions that address these measures.

Sage Payment Solution allows you to the ability to manage payment from the cloud. Process checks and accept any authorized ACH deposits safely and securely. View and manage all your activities in a simple, real time dashboard!

An on-premise solution from Piracle, Create-A-Check, seamlessly integrates with your current accounting application. Piracle has worked constantly to stay one step ahead of the people whose goal is to defraud your company. Their software and security enhanced blank check stock address all of these issues and more.

Call us today at 480-423-8300 or email us to learn more about preventing fraud.