Financial Technology

Financial Technology

October 20, 2011

Corporate Check Security - Preventing Fraud While Achieving Process Improvement

By TMCnet Special Guest
Steve Woodard, President & CEO Quadrant Software ,

Check fraud at the corporate level has reached epidemic proportions with losses ranging between $10 and $14 billion per year in the U.S. alone, according to recent findings from Nielsen Report and Ernst & Young.  But check fraud continues unabated because most companies either don’t think it can happen to them, or are under the misconception that they have all the safeguards they need in place.  In short, check fraud flourishes because there is an abundant supply of companies who make getting away with it easy.

One of the most effective ways to prevent check fraud is by securing your check printing process.  This is especially critical because printing is the level at which fraudulent checks can be produced on genuine check paper, using genuine inks, genuine fonts and genuine signatures.  In essence, a criminal who can hijack your check printing software is capable of producing the perfect fraudulent check.

The type of check printing software you should choose depends on several factors including the size of your business and your budget, but, at minimum, check printing software should be selected based on strict security requirements where user authority and access is easy to monitor, control or change.  Also, your check printing solution should be able to produce detailed check printing activity reports as well as Positive Pay reports to verify your check transactions with the bank.  It’s very important to point out that if a company cannot provide a Positive Pay report to a bank then the company is held accountable for the fraudulent check and it is not insured.  So, if the fraud artist passes a check for $1 million and the funds are transferred, the bank has no obligation to make reparations via insurance or any other means.

Additionally, check printing software should meet the following criteria:

  • User Authorities -- The software should allow the administrator to define who can access design as well as print/ merge functions. Top-level solutions also assign authority levels to different stored signatures based on check amount.
  • Blank Check Protection -- Prints ‘VOID’ if something other than the check amount appears in the check amount location in the spool file.
  • Audit Logs & Positive Pay -- Tracks all check printing activity including time, user identity, amounts, check numbers and other detailed information. A check printing software solution must also produce Positive Pay reports used by banks when negotiating check fraud issues.
  • Signature Security -- Signature security includes the iron clad safe storage of scanned signatures as well as designating who has the ability to print checks using that signature. The best solutions allow signatures to be stored on removable devices that can be locked away if necessary.

In addition to reducing risks associated with fraudulent checks, a top-quality check printing solution also yields significant benefits in workflow management, cost savings and minimizing human error. Consider the following factors and implementing a check printing solution becomes a win-win scenario from any angle:

Eliminate costly and risky blank checks:  Many check printing solutions require that you purchase and store high-risk blank checks. That is, checks with all the printed fields and design elements included, such as MICR (Magnetic Ink Character Recognition) lines, logos, blank numeric and written check amount fields, and sometimes even preprinted signatures.

In essence, all the hard work in creating a fraudulent check has already been completed.  Not only are these checks expensive to order, but having just one of these checks falling into the wrong hands can be catastrophic. However, check printing software can generate everything from the MICR line to the company logo according to the users’ specifications, eliminating the need to store pre-printed checks.  

Print checks securely to remote locations:  A check printing solution that only works on local printers may be fine for a small business, but if you have more than one location, mailing checks can be both risky and expensive.  A MICR check printing solution should grow with a company and that means having the ability to deliver secure print jobs to multiple remote locations, while ensuring that the security of those remote locations is managed under a single entity.

Design and modify checks easily and efficiently: Another reason why blank checks are expensive is that a simple area code change or company name/logo alteration can transform thousands of expensive checks into thousands of flimsy bookmarks.  A check printing solution using unprinted check stock allows the user to design checks from scratch, and that means having the ability to make minor or major modifications in a few moments and at zero cost.

When you add up the numerous benefits of check printing software, the return on investment is clear – minimizing the chances for fraud and theft, while improving the overall check writing and distribution process.

Steve Woodard, President and CEO Quadrant Software

Stephen Woodard is the President and CEO of Quadrant Software

TMCnet publishes expert commentary on various telecommunications, IT, call center, CRM and other technology-related topics. Are you an expert in one of these fields, and interested in having your perspective published on a site that gets several million unique visitors each month?
Get in touch.. During his 20+-year career, he has worked with both entrepreneurial and established technology companies in the U.S. and Internationally. Quadrant Software is the leading provider of Document Output Management (DOM) software and solutions for the enterprise. Through DOM, companies can electronically create, manage, and distribute mission critical documents to reduce expenses, increase productivity and improve communication in a more secure and compliant manner.

Edited by Rich Steeves

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