Forge Me if You Can
Though the Check Clearing for the 21st Century Act (“Check 21 Act” or simply “Check 21”) isn’t new anymore, the issues have not been sorted out and “Check 21” as a topic of debate, confusion and aggravation is far from finished.
Partially, the reason for the ongoing dilemma is a discrepancy between what the legislation means and how it works. Check 21 affects banks, distributors, producers and consumers in different ways. These groups are trying to reconcile the issues that have the greatest impact on their own uses and purposes.
For banking institutions, Check 21 simply allows the image of a check to be legally considered as a negotiable document. The legislation designates how original paper checks can be truncated (removed from circulation and replaced with electronic images), transmitted and reconverted (reprinted on paper). The act also designates who is accountable in certain cases of fraud.
Nothing in the legislation specifies how checks must be designed, but banks have been applying pressure to make scanned copies of checks easily readable. The requests from banks vary—some value security features over scanning ease while others insist checks be easily read by optical devices.
Check distributors are in an unenviable situation when it comes to Check 21. They must alleviate consumers’ fears while trying to make sense of the regulations. On top of this, check security features must be precariously balanced. In many cases, unless a distributor works to stay informed, it is unlikely he or she would notice any serious changes. As Jim Powers, customer service manager at Giraffe Document Solutions, Louisville, Ky., pointed out, “[Check 21] hasn’t had as big an impact as I thought it would. ... Some banks don’t even enforce [the new standards].” Even so, Giraffe has made sure to adjust documents to be in compliance. Specifically, the company has redesigned its void pantograph. The new pantograph utilizes digital, direct-to-plate technology and keeps the pantograph away from areas of interest which might interfere with a bank’s ability to read the scanned version.
Related story: Why is Check Fraud Easier Today?