While high technology crimes make headlines, good old-fashioned
checks are the largest vehicle for payment fraud
according to Associates for Financial Professionals (AFP)
Payment Fraud Survey (www.afponline.org). AFP stated 74%
of organizations who were targets of payment scams were
targeted via check fraud. Checks provide an easy way to
replicate vital account information such as account, routing,
and check sequence numbers. It’s easy for fraudsters to
obtain this sensitive account information by stealing a check
from your check register at the office, finding paid or canceled
checks that were not securely disposed of, or a check found
in a mailbox intended to pay a vendor. Common types of
check fraud include a valid check that’s payee names and
dollar amounts are altered, counterfeit checks drawn on real
accounts or checks obtained from opening a false account
based on fraudulent ID, and forged checks which are falsely
endorsed.
Unlike paper checks, automated payment processing offers
payables to be made digitally from bank to bank. Using
automated banking tools such as ACH Origination, Online
Bill Pay, and Purchasing Card can help decrease the number
of checks paid and mitigate the risk of account information
from being exposed. Replacing paper checks with secure
electronic options can help eliminate error-prone manual
processes, improve controls to safeguard sensitive
information, and provide clear visibility to better supervise
activity. Forecasters stated electronic transactions will
replace 25% of check payments in the next 10 years (www.stopcheckfraud.com).
The use of fraud monitoring tools like Positive Pay are
currently the most effective means against check and ACH
payment fraud. With Positive Pay, your bank only pays the
checks or ACH debits preauthorized in your Positive Pay file.
Any unauthorized checks or ACH debits are not paid, and
you are notified of a suspect. Positive Pay helps businesses
detect suspicious transactions, reduce errors and safeguard
account assets.
- Check Positive Pay - Upload a file containing your issued
check and the system will compare items presented for
payment against the submitted file. Any discrepancies
of check number and dollar amount will be identified
and presented for verification before processing the
transaction.
- Payee Match - Compares the submitted payee
name along with the check number and dollar
amount on the check image.
- ACH Positive Pay - Manage your ACH debits and credits
posting to your business account using filters. This
service allows you to pay or return ACH debits that do
not match an existing pre-authorization.
- Reverse Positive Pay - Monitor your paid checks with a
daily report and provide a return decision for any check
determined to be unauthorized.
- Full Account Reconciliation - A reconciliation report
of paid items to the check issued record that provides
comprehensive information.
Contact Bethany today to learn more about CNB’s Cash
Management Solutions and how they can help improve your
organization’s defenses against payment fraud.
This material provided by Bethany Arnold.