Safeguard Your Business Against Check Fraud

BY: Sam Huntington


Although the number of checks presented for payment is decreasing every year, the losses from check fraud, unfortunately, are rising nationwide. In some cases, checks are stolen from unsecured mailboxes and the payee line is altered, to allow the check to be negotiated by another party. In others, the routing number and account number information is used to order new check stock. 

As accountholders, we sometimes forget that those numbers printed in magnetic ink on the bottom of a check give anyone the information they need to order checks at their local office supply store.
When a fraudulent check clears a business account, the customer has a very short window of time to inform the bank that the check is not authentic. If the bank receives notice outside of that window, it needs to rely on the cooperation of other banks – and the hope that, somewhere, there are funds to recover – to correct the problem.  

The reality is that, in most instances of check fraud, law enforcement agencies are usually not able to devote resources to the pursuit of suspects unless there is an identifiable pattern, and the losses are very large. Even when this criteria is met, prosecution is not guaranteed, and the chance of recovering funds for the affected parties is virtually non-existent.

The most effective deterrent to check fraud that customers have at their disposal is perhaps the most obvious: the vigilant monitoring of their accounts. State Bank of Cross Plains clients are able to view images of their checks when conducting online or mobile banking. Viewing checks on a daily basis and notifying the bank when any irregularities are spotted is a step in the right direction to avoid losses.

A more proactive and convenient way to combat check fraud is the Positive Pay service. With Positive Pay, a business accountholder uploads a list of authorized, issued checks to our secure website. We compare that list with all checks presented on the account. If the payee name, amount, or check number does not match the list the accountholder has provided, we notify the customer and allow them to view the check online and make the decision to pay the check or return it.

Positive Pay has saved our clients many thousands of dollars in check losses this year alone, and we would welcome the opportunity to show you how it works in person. For more information, or to schedule a meeting, please contact your individual account manager or the State Bank of Cross Plains at (855) 256-7328.
Author:

Sam Huntington

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