Check Fraud is a Preventable Crime

Author:     Tuesday, August 26, 2014 12:00 AM

Accessing bank funds belonging to another individual or business entity through subversive means is considered bank fraud. In recent years, the banking industry has conducted multiple studies to determine the actual cost of fraudulent activities, including check and debit card fraud. Each year, the losses from check fraud top $12 billion and from debit card fraud $700 million. Efforts to protect all accounts from nefarious actions are an ongoing concern that requires efforts from banks and customers alike.

  • Check clearing delay – At the close of the business day, bank officers participate in the evaluation of checks that are over a certain dollar amount. Careful scrutiny is applied to each check to determine concerns arise. Investigation of the largest checks will reduce the amount of money that might be lost to fraud. Holding a check for 5-10 business days allows each bank to conduct studies that will reveal potential fraudulent checks.
  • Physical check security – Specialized filigree paper, which has a unique feel, is used when printing blank checks. Banking professionals are experts at recognizing fake checks that appear in the check-cashing process. Extensive training is conducted to ensure that everyone who handles checks can recognize the latest security features. The presence of these features assures decision makers that the checks are valid. Every precaution is taken to protect the supply of the filigree paper.
  • Customer information – Extensive applications dispel concerns over accounts that are opened for fraudulent activities. Bank employees interact with dozens of people each day. Knowledge of the people behind new accounts reduces the risk of fraud. Online activities must include every possible validation of customer information provided through web forms.
  • Internet security protocols – As an industry, banking employs the most advanced Internet security protocols in existence. Integrity in the world’s banking systems protects currencies, securities and economies. All information provided must be verified across multiple authorized databases. Errors cannot be bypassed without direct intervention from a trained banking specialist.
  • Transaction limits – Automated controls include dollar amount limits for each bank account. Customers can request specific limits for each checking account based on the ways in which the funds would be accessed. All checks that exceed the set dollar limit would be cause for contacting the accountholder for validation.

Banking professionals recognize the potential for preventing fraud through every stage of the check clearing process. Customers should never run into obstacles for valid spending transactions. Fraudsters continue to change the methods through which funds are stolen. Constant efforts will be required as long as thieves spend so much time and effort attempting to steal money that belongs to others.

Source: BFI