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Discover the peace of mind that you will experience when choosing the protection provided by our SECURESTAR ® Program. Protection that helps prevent loss due to check fraud including altered and counterfeited checks. With our SECURESTAR ® line of products, we make it practical and affordable to protect every at-risk document issued by your financial institution.
Check fraud loss in the U.S. continues year after year. This trend has been attributed to criminals having access to easy-to-use and affordable technology such as personal computers, high-resolution scanners and laser printers to create realistic fraudulent checks. They also use chemical erasures to alter the checks and phony I.D.s to pass them.
The best defense financial institutions and commercial businesses can take against check fraud is to have:
Knowledge of the Uniform Commercial Code (UCC) Internal controls Preventive security measures
KNOWLEDGE OF THE UNIFORM COMMERCIAL CODE
In the past, financial institutions were held responsible for most of the financial losses due to check fraud, however recent revisions to the UCC have passed some of that liability onto businesses and corporations. In most cases, courts will refer to sections 3 and 4 of the UCC for the concepts of “ordinary care”, “contributory negligence” and “comparative negligence” to determine which party is in the best position to prevent the fraud.
INTERNAL CONTROLS Continuous monitoring, classifying and evaluation of fraud losses by upper management, with results reported to the audit, risk management, security divisions and senior management. Regular evaluation of operating procedures with appropriate changes when needed. Alerting personnel to current check fraud schemes and how to prevent them.
PREVENTIVE SECURITY MEASURES
Preventive security measures are vital to the establishment of “ordinary care” in check fraud cases. A simple and immediate measure is to incorporate security features into all official checks.
The SECURESTAR ® Program includes the following security features; each designed to help in the fight against fraud:
Padlock Icon Warning Band and Warning Backer Microprint Signature Line • High Resolution Border Thermochromic Ink Full Chemical Reactivity Invisible Fibers Holographic Foil Genuine Watermark in Paper Holograms Toner-Fusing Paper Other effective preventive security measures include: Positive Pay Program Reverse Positive Pay Program Electronic Check Presentment (ECP) Account Reconciliation Sweep Accounts Lock Box Automated Clearing House (ACH) Pay Card Purchase Card Electronic Data Interchange (EDI) TOP FOUR CATEGORIES OF CHECK FRAUD
Altered checks Counterfeited checks
Checks drawn on closed accounts
Altering checks is a common type of fraud that allows a criminal to modify, without destroying, an otherwise genuine check by using chemicals or other means to remove the payee name and/or the check amount. The criminal then fills in a different name and/or higher amount. Financial institutions can combat altered check fraud through:
Check and signature reviewing procedures Positive pay or reverse positive pay programs Electronic check presentment programs Security features in all their official checks
Check counterfeiting consists of copying a valid check, without authority or right, with the intent todeceive or defraud. The counterfeit check can be drawn on a legitimate account or presented along with false identification. To protect against counterfeit check fraud, financial institutions may: Use a positive pay or reverse positive pay program Thoroughly review customer identification Train personnel to carefully inspect checks Use unique or custom-designed checks along with visible and hidden security features to steer criminals in search of an easier target
Forging checks includes the act of forging the maker’s signature or the endorsement with the intent to defraud. Financial institutions should establish strict identification review and signature verification procedures.
CLOSED ACCOUNT FRAUD
Usually based on a criminal writing a check against a closed account and then relying on float time. Financial institutions should closely monitor inactive accounts and contact customers about the status of those accounts.
CHOOSING A CHECK PROGRAM
Choose a check program that includes a complete array of security features for negotiable documents. The SECURESTAR ® Program was designed to contain a minimum of five visible and two hidden security features included in every official check. In addition, SECURESTAR ® checks will have no missing numbers, and each inner carton is sealed with tamper-evident tape. Select from our standard SECURESTAR ® line or let us create a custom official check that will reflect your unique image.
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