Check Fraud

It’s hard to resist Leonardo DiCaprio’s charm, and we admit, it may have led us to sympathize too much with his real-life character, check-fraud expert Frank Abagnale Jr., in “Catch Me If You Can.” The reality is: Abagnale committed those crimes—and there are many others like him out there.

But it isn’t all bad news on the check security front. While the 2015 AFP Payments Fraud and Control Survey names checks as the most targeted method of fraud at 77 percent, that’s a decrease from the 2014 survey’s 82 percent.

More good news, according to John LaBrant, regional sales director, value document inks for Springfield, Virginia-based SICPA Securink Corp., is that while overall check usage continues to decline, the business check market remains strong.

With this demand for checks, printers keep creating and implementing advanced features to help their clients stay safe and protected. “Continued check use will ensure check fraud remains, and so too the need for more secure checks,” said LaBrant. Consider these ideas in order to determine how to best secure the checks for your company’s future.

THE PRICE IS RIGHT

In terms of security, it’s true that businesses get what they pay for. But with the right printer, they also get specifically what they need. “Printers and customers need to evaluate their current revenue losses related to fraud, as well as how their checks are being targeted,” said LaBrant. With this information, he explained, printers and customers can work together to determine what security features are most important for the specific company and the most cost-effective solutions to achieve them.

That doesn’t mean they need to spend top-dollar to employ a number of effective security measures. The FTI Group recently introduced new ink that offers features that had only been in use for high-cost security paper at no additional cost, according to Bob Diamond, CEO of the Redmond, Washington-based company. The ink produces chemical voids and is erasable, so when counterfeiters attempt to change the payee or amount on a check, they will destroy the pantograph.

Portland, Maine-based Pyramid Checks & Printing also offers affordable options. “There is no need to purchase checks without any security features,” said Janet Casey, customer service manager. “All of our laser checks are low cost but provide users with at least six security features.”

LAYER IT ON

With so many attempts to counterfeit checks, it’s necessary to add layers of defense and protection. “The overt features are important because they are your first line of defense against would-be criminals,” said Casey.

But, in an increasingly technological world, design features, like a void pantograph, are not enough, said LaBrant. Printers and scanners are too good at bypassing them.

“A combination of overt, covert and forensic security features creates a multi-layered security system and most effectively protects against fraud,” LaBrant noted. “While counterfeiters might be able to simulate an overt feature passable to the untrained eye, multi-layered checks incorporate covert, or hidden, security features that require some type of device not commercially available to authenticate, and training on what to look for to authenticate.”

When companies use a combination of anti-tampering and anti-duplication security features alongside ink- and paper-based security, it allows printers and customers to adapt once a threat is identified, LaBrant explained. If counterfeiters get through one wall, they’re still faced with several more.

This multi-layered concept is not only important for prevention, but in the aftermath of fraud. “[...] By adding security features, if and when you do run into a fraudulent problem, you will be far better off with the bank and in the courts,” said Diamond, who pointed out that banks are more likely to reimburse those using good practice security.

THE BANK IS A FRIEND

Printers, suppliers and customers are important to the security discussion, but don’t leave the bank off that list. In fact, Diamond urges companies to institute “Positive Pay”—a program that notifies the company when the check number, amount and issue date on a given check don’t match the information already on file—with its bank from the beginning.

LaBrant and Casey also acknowledge the bank’s role in successful fraud prevention. A company should work with the bank to assess its risk and to determine what checks and features would work best, bearing in mind its typical check amount, number of checks and where the checks are sent. Consider questions like: “Who will be authenticating?”; “How many people will be authenticating?”; “In what environment will authentication take place?”; and “Are those authenticating sufficiently trained and educated?” LaBrant suggested.

“The printing and banking industry should continue to work together on solutions to minimize check fraud,” added Casey. “There is much we can learn from each other and share with our distributors, who, in turn, can assist their clients in protecting themselves against theft.”