There seems to be a steady stream of stories in the news lately about bank fraud. The American Banking Association (ABA) came out with a report in the last few months summarizing 2012 figures and the stats are eye-opening.
Debit card fraud (54%) and check fraud (37%) accounted for the majority of more than $1.7 billion in losses in 2012. The remaining 9 percent of losses were attributed to online banking and electronic transactions. These figures were gathered in an ABA survey between March and July 2013 that included 145 banks with $6.2 trillion in total assets.
The leading check fraud categories were return deposited items, forgeries, and counterfeit checks. If you are a company owner, your first likely question is what can we do to reduce exposure? Whether you are using paper or laser check printing, no method is 100% foolproof. But laser check printing provides three key advantages over paper checks.
- Storing and securing multiple boxes of preprinted check stock for each of your bank accounts is less efficient and less secure than having a single source of blank check stock. If someone wanted to steal checks would they go after the preprinted check stock or blank paper? Software for laser printed checks requires user verification before an order to print can be submitted.
- Signature cards wear out, get lost or misplaced, and can be taken off site by accident or intent. Software signatures are encrypted, have multiple layers of password security and printing can be controlled based on check amount or account number.
- Laser check printing provides better tracking than preprinted check stock. Laser check printing software provides its own check printing log or check register that logs every check printed. You will be able to input the user that ordered the check printed, check number, amount, payee, and much more.
These are just a few of the advantages offered by laser check printing. But there are certainly other steps that can be taken to protect your company from check fraud. The most important thing you can do whether you are using paper checks or laser check printing is to deeply understand the process, assess points of vulnerability, and then create a security plan that is rigorously enforced.
In the case of laser check printing software, make sure to understand and manage who has password access, how to work with banks for approval, what kind of special purchases are necessary like MICR toner, and what purchases are not (special printers). We have put together an e-guide you can download for free that covers everything you need to know.
It should be noted that the 1.7 billion dollar fraud figure could have been much worse. According the ABA report, attempted fraud approached the $15 billion dollar mark. The nation’s banks (with an occasional assist from savvy customers and companies, I would assume) stopped $13 billion in fraudulent transactions. The ABA would like individuals and companies to partner with their banks to reduce fraud even further. Here are the recommendations:
- Protect your PINs and passwords and social security number. Don’t share this information with anyone and periodically change your passwords.
- Shred sensitive papers including unused credit card offers before throwing them away.
- Keep an eye out for missing mail. Consider enrolling in online banking to reduce the likelihood of your paper statements being stolen.
- Monitor your credit report for unusual activity.
- Protect your computer. Make sure the virus protection software on your computer is active and up to date. When conducting business online, make sure your browser’s padlock or key icon is active.
- Protect your mobile devices. Use the password lock. Make sure your phone is wiped clean before selling.
- Report any suspected fraud to your bank immediately.
FEB