We are currently living in a digital age where outsourcing payment processing is easier than ever before. You can now make payments in a minute either on your phone or online. With the advance of technology, checks have been reduced in use to being nearly obsolete. Though the number of checks cashed continues to decline each year, they still add up to approximately $26 trillion, according to a study carried out by the Federal Reserve.
You may keep your checks longer than you used to but be careful if you decide to reorder online. Some sites that print checks produce checks that may expose you to fraud. Some may even be rejected by banks and rendered useless completely.
According to the Fed, $1.1 billion is lost to fraud committed by thieves annually. The number has consistently grown over the past few years says, Frank Abagnale. He’s a consultant for secure documents in Washington, D.C.
The reason for this is that although checks have become almost obsolete due to technology, it has become easier for criminals to do check fraud. Before he got into the security business, Abagnale was perhaps the best check forger all time. In 2002, a film detailing his memoir, Catch Me If You Can, was released with Leonardo DiCaprio as the main star.
He says that when he used to forge checks half a century ago, you needed a Heidelberg printing press worth $1 million as well as negatives, plates, chemicals to make plates and color separations.
He adds that all you need today to accomplish the same task is a laptop, an inkjet printer, a check paper which you can get at any stationery store and basic skills in graphic design. To add salt to injury, much of the information on how to make fake checks is available online.
Security Features to Fight Back
Printers are now equipped with security features that help them fight check fraud:
Reactive ink or paper. It changes its appearance once it’s exposed to chemicals hence revealing check washing attempts.
Microprinted words. They prevent easy counterfeiting since they cannot be duplicated by most copiers and printers.
Ultraviolet reactive paper. Based on its reaction to black light, bank personnel can be able to determine its authenticity.
Holographic seals that are difficult to copy.
Heat reactive markings. Hard to duplicate since they fade when touched after which they reappear.
Carefully printed designs at the back of checks which are mangled by copiers and printers.
The reactive ink found on the back of the check disappears when the checks are exposed to solvents that are mainly used in check washing. This automatically alerts the bank personnel that the check is fake.
Though most personal checks lack all of these features, they have enough to enable them to meet industry standards like certification by the CPSA (Check Payment Systems Association). It’s a small padlock icon just beside the amount line.
Not Enough Security
Some of the checks available online, unfortunately, fail to meet the CPSA standard. They also don’t have some of the features that are found in well-known printers.
Checks-Superstore.com is among the most widely advertised check-ordering sites. Its checks have the padlock icon and a reference to the previous name of the CPSA, “Financial Stationers Association.” However, they don’t meet most of the safety marks that have been standardized among major printers.
Similar to the major-printer checks purchased from Costco, there’s a microprinted line at the back of the checks from Checks Superstore when you look carefully at the microprinting on the checks. All is well so far.
On most checks, the front signature line is usually microprinted text. Even though it has the MP label (microprint), all it is a squiggly line on the check from Checks Superstore.
When Abagnale analyzed the checks, he discovered the same thing.
He says that once you use a microscope, you should be able to read the microprinting which wasn’t possible in this case.
The checks could end up being rejected by businesses or bank personnel, as they check for authenticity because they don’t have microprinted words.
Recognizing a Pattern
The main printer checks have some sophisticated designs that make them hard to forge. They have hard-to-copy designs which are printed on the border or the back. They fade when an attempt to scan them is made.
The checks from Checks Superstore lack these designs and instead go for a less complicated design which can be easily copied. When tested with our office copier, the difference between the copies and the actual checks was very small.
Some weaknesses in the checks may be attributed to the paper that was used to print them. Most major checks are printed on paper that gives a specific reaction like changing color when exposed to chemicals used for check washing.
The checks from Checks Superstore don’t react at all when they are exposed to various chemicals.
Abagnale says that the check is not protected chemically and that it would be quite easy to wash it and change it. The check lacks protections from bleach or acetone, which is present in most bank checks.
The challenge is real in this case since there’s no clear way through which a store clerk or bank personnel can check the authenticity of the check.
Rejected by Banks
“Banks can reject checks if they lack the required security features,” Doug Johnson says. He works at the American Bankers Association as the senior vice president of payments and cybersecurity.
“Always be aware of the security features that your bank may require when ordering checks,” says Johnson.
If some other information such as routing number on the check doesn’t match with your bank records, the check may also be rejected.
This is the reason behind the verification of the account holder’s information before checks are printed so that they will not be rejected.
However, not all the sites do that. Checks Superstore doesn’t. Investigations via the Better Business Bureau suggested that there have been misprints in checks in the past.
The company, however, promised to rectify and reprint the mislabeled checks in response to the complaints that had been lodged with the BBB. Checks Superstore also placed some blame on the customer as well.
Johnson says that there could be more at stake than just the cost of a few misprinted checks.
It’s easy for a criminal to get checks if he has your account information, Johnson continues to say. All he needs is a site that doesn’t usually verify account information with the bank. What he needs is your last check number, your routing number, and account number and within a few days he will be writing and signing checks against your account. It will only cost him a few dollars to achieve this.
Not Easy for Victims
Check fraud can easily leave a huge and irreparable hole in your account balance.
Abagnale says that victims of fraud have a one-month period to report the fraud after receiving their bank statement. He continues to say that if for some reason the victim fails to report the fraud, maybe the account isn’t used often, or they didn’t notice the odd transactions, most banks won’t cover the losses incurred. This is why Abagnale recommends keeping a close look at the transactions you execute through checks. This is a very effective way of fighting fraud.
He says that the best thing you can do is to reconcile your account.
Why Security Checks from Deluxe Can Prevent Fraud
For protection against fraud, high-security checks are created with several layers of defense. It’s now very easy for criminals to reproduce fake business checks with the modern copiers that produce duplicates similar to the originals. Deluxe, who has been in this business for over a century, has, however, come up with a few incredible security features that make it virtually impossible to duplicate high-security checks.
Below, you will find six ways through which fraud is prevented by high-security checks:
Most of the commonly used printers have the built-in proprietary technology. This ensures that all the fraudsters will get either a blank or a black page when they try to copy checks, regardless of the quality of the copier they use.
A multi-dimensional seal that contains built-in security features is hot stamped onto each check.
This is ink which disappears once heat is applied to it. This feature cannot be replicated by copied checks.
Watermark pressed into paper is visible if you hold the check up to a light source. It will not appear in copied or scanned checks.
Mobile Remote Deposit Reminder
To prevent depositing checks twice, you can easily track and date transactions executed through your mobile device.
There’s some high-security features available in high-security checks that cannot be seen. They include a chemical-wash detection area, chemically sensitive paper, and invisible fluorescent fibers among others.
Despite the high technological advancements that have been made, checks are still widely used today as a favorite means of payment by many businesses. From vendor bills to payroll, high-security checks made by Deluxe can help you ensure that your transactions remain as secure from fraud as possible.
Reasons Why a Check May Not Be Honored
There are several reasons that may lead to a check not being paid out. They include a difference in the amount in figures and that in words, a difference in the signature and the specimen held, insufficient funds and making changes without sufficient signature authority.
If any of the following is stated as the reason for dishonoring in the notice, then you have the option of re-banking your check: (i) refer to drawer, (iii)effects not clear, or (ii)postdated.
If, however, there are any other reasons, you should contact the drawer of the check as soon as you can.
Protecting Yourself from Check Fraud
There are thousands of people that are victims of check fraud each year. Most of these cases are mainly due to errors in writing the check or the checkbook being stolen.
Here are some of the basic rules that you can follow:
Always keep your checkbook safe and secure
Don’t sign a blank or incomplete check
It’s also important to ensure that the check will only be cashed in by the intended company or individual. For this purpose, write these words across the face of the check in two parallel lines: ‘Account payee only’ or ‘A/C payee only’ or ‘Not transferable.’ Always make sure that you have the right payee name.
You can also write the words ‘Not negotiable’ on the face of the check in two parallel lines. This will ensure that the check can only be cashed in a bank account. If a check is marked ‘Not negotiable’ there’s a possibility of it not being paid to the intended person, but it will still have to be paid to a bank account regardless.
In the amount in words section, begin writing from the extreme left of the provided space. Also, write the word ‘only’ after you are done with the amount. This will serve to ensure that no other characters can be added.
If there’s any unused space in the payee or amount sections, draw a line through it. This rules out the possibility of there being unwritten space.
If you make a mistake, make the necessary correction and then confirm it by signing your signature beside the correction.
Notify your bank immediately if you change your postal address.