Selling security documents requires responsibility
By Eric Fiedler
In business as in life, it's better to be safe than sorry--especially if being sorry means losing hundreds and perhaps millions of dollars.
Companies are willing to spend big money to avoid getting ripped off, which can mean big profits for document security suppliers.
Document security, however, is a serious cat and mouse game for manufacturers and distributors who must market their products without playing into the hands of criminals. "All of us that supply negotiable documents bear risk and responsibility," said Jack Schirmer, a product manager at Mead Paper in Rumford, Maine.
Schirmer and P. Richard Parrish, manager of distributor sales at Miami Systems in Shelby, Ohio, offered some revealing tips on how to stay ahead of both criminals and competition. Two main themes prevail: don't trust anybody who claims to have a perfect product, and always know your options.
What issues should distributors keep in mind when serving as 'document security consultants' to their customers?
Parrish: "First and foremost, distributors need to be sure to explain to their clients that no security feature is 100 percent fraud-proof. Any manufacturer that claims otherwise should be avoided. I say this for two reasons. First, it's true. Second, unfortunately, some manufacturers are claiming their respective features are fraud-proof. All anti-fraud features can be defeated by a resourceful criminal.
"Also, distributors need to know that every day more clients are building security features into their products. That means the chances of becoming a victim increase for those who haven't built anti-fraud measures into their documents. In other words, if you live in the one house on your block with no security system, don't be surprised if your the one house that gets robbed."
Schirmer: "A good document security program needs to include both paper-based and printed-on security features. The distributor also needs to be aware of the Uniform Commercial Code and the issues of ordinary care--which require users to observe reasonable commercial standards in business transactions, and comparative negligence--which is the allocation of loss if ordinary care is not exercised.
"Recent opinions of legal experts have been that failure to use papers with proven security features may be considered negligence in court rulings. Now that losses have gotten to be greater than $12 billion per year in checks alone, the banking industry is fighting losses in court and businesses and individuals are becoming liable."