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Are You Protecting Yourself Against Check Fraud? Author's Picture

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Lacie McDowell

Are You Protecting Yourself Against Check Fraud?

Have you ever thought about what you would do if you became a victim of check fraud and how it would affect the daily operations of your business? Or are you one of millions that it has already happened to?

Today, it is not a mere question of IF it has happened to you but WHEN it will happen. I work with businesses on a daily basis and ask them these same questions that I am asking you. On most occasions I get the same recurring comments, “I guess I will deal with it when it happens” or “it hasn’t ever happened before, we will be fine.” According to the 2014 AFP Payments Fraud and Control Survey, 60% of organizations were exposed to actual or attempted payments fraud in 2013. Check fraud continues to be the dominant payment form targeted by fraudsters, with 82% of survey respondents indicating in 2013 that checks were targeted at their companies.

One particular small business customer that I have worked with thought it couldn’t possibly happen to him either, but before he knew it, someone had captured his bank routing number and account number from the bottom of his checks and was creating and cashing fraudulent checks totaling over $30 thousand in a matter of a few hours.

You might be asking yourself, am I doing what I need to do to protect my business from those creepy criminals???????????????????????????????????????????????????????????????????????????????????????????????

So I ask you, have you taken the steps to set up internal controls and strategies within your business?? Controls such as ensuring that you have a system of checks and balances to warrant that no one person has control over all parts of a financial transaction, reconciling your bank statement every month, locking up your blank checks with only limited access, and not signing blank checks. These are only a few ideas to get you thinking on what internal procedures you have in place to safeguard your business.

My next question to you is, are you having conversations with your financial institution to ask how they can assist you in protecting your business? Financial institutions offer products and services such as Positive Pay for check fraud prevention. Positive Pay is a tool used to deter check fraud. You simply send in a file of the checks that your business has issued that day and they are compared electronically with the checks that are clearing the bank. If the check does not match, it is sent to you for you to decide if you want to pay or return the check.

In working at both community and large banks, I have seen more check fraud than one would even imagine. So my last question to you, is your organization protected? Talk with your bank account officer today – don’t wait!!!