Score a Touchdown Against Check Fraud with Positive Pay
BY: Sam Huntington
Losses from check fraud continue to rise steadily nationwide, and our market here in the Greater Madison Area is no exception. Check fraud accounts for more losses than any other type of payment method because:
- Business accounts have a much shorter window of time to alert the bank of possible fraud than consumer accounts.
- There is a lot of important account information on every check, and everyone now has a camera in their pocket to record this data.
- Even though many businesses generally use good protocols to protect their check stock in the office, eventually they need to transmit them to the payee. Checks may then become less secure, often in unsupervised mailboxes, lying on desks, and being exposed to many sets of eyes.
- Check fraud is relatively low tech. It is not overly difficult to change information on a paper check or to create a counterfeit check. We see this done by common household chemicals.
The silver lining is, there's an easy solution that can greatly reduce the opportunity for check fraud impacting your business deposit account: It’s called Positive Pay.
An image-based fraud prevention service that compares checks presented for payment against ones that you tell us are authorized Positive Pay works as a sort of reverse stop-payment order. When you implement a stop payment, you’re telling us about a check you don’t want us to pay; with Positive Pay, you're giving us a list of checks you do want us to honor.
If anything about a check that's presented to us doesn't match something on list, it’s flagged for your review. You can see an image of the check on our secure website, and if the check is unauthorized, you can reject it and we’ll return the check to the issuing bank.
In addition to account number and amount, Positive Pay uses optical character recognition software to prevent someone from altering the recipient of the check. It's a convenient way to gain peace of mind and added security by reducing your exposure to scammers.
Judging by the number of fraudulent checks Positive Pay has identified this year, check fraud shows no sign of diminishing. For more information about our Treasury Management services or to schedule a meeting to discuss these options, please contact me at (608) 826-3516.