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Check Security

We have had some reports lately of check fraud perpetuated on some of our clients. It seems that the movie Catch Me If You Can has encouraged copycats! In 2002, there was over $20 billion in check fraud losses.

Check Washing
Using a process known as check washing, mail snatchers erase the ink on a check with chemicals found in common household cleaning products such as acetone, benzene, bleach, etc. and then rewrite the checks to themselves, increasing the amount payable by hundreds and even thousands of dollars. Check washing takes place to the tune of $815 million every year in the U.S. And it is increasing at an alarming rate.

Our client who suffered from this fraud had a $30,000 check intercepted. The payee name and address was washed off and replaced with the criminal’s name and address and cashed. Our client’s bank tried to avoid being liable for the $30,000.

Check reproduction
Another client was notified by their bank of a check for $11,000 with a questionable signature. Someone apparently got hold of one of their checks and had check forms printed using their identical logo, name and address, bank information and MICR coding.

Security Features
Micro Management Associates highly recommends using checks with Premium Security Features. Although, there is no ultimate protection against check fraud (except perhaps Positive Pay), these forms provide additional check security features.

Our standard check forms provide the following EIGHT security features:

• Warning Box (back of check) – Lists security features incorporated into the check and helps to deter check fraud.
• Original Document Screen (back of check) – Verifies the authenticity of the check and is hard to reproduce
• Invisible Fluorescent Fibers – Protects against scanning or photocopying. Fibers are only visible under UV light.
• Padlock Icon and warnings (face of check) - This industry standard identifies that security features are incorporated into the check.
• Microprint Borders – Borders contain small type that is only visible under magnification. Protects against scanning or photocopying.
• Erasure Protection – Check background and border are printed in colored ink and may be removed if attempts are made to erase or alter information.
• Chemically Sensitive Paper – Stains or spots may appear when chemical alteration attempts are made to any of the printed notes on the check.
• UV Dull Paper – Specially formulated paper is not readily available. Looks different from standard paper under ultra violet light. Discourages Duplication.

In addition to the standard security features listed above, our checks with TamperGuard Plus^TM Premium Security Features, have these state-of-the-art characteristics:

• True Watermark - A pattern in the paper becomes visible when held to light and disappears if scanned or photocopied.
• Toner adhesion Chemistry - Toner adheres better to the paper to protect against alterations.
• Enhanced Chemical Sensitivity - Stains appear if alterations are attempted with certain types of chemicals.

TamperGuard Plus^TM checks are 10% additional. Please contact us if you would like a sample of a check with Premium Security Features.

Positive Pay
Some banks now offer a service called Positive Pay. With Positive Pay, you submit an electronic file to your bank with all the checks you have written including check number, date and amount and the bank will then not cash any checks against your account unless they are in this file. If your bank offers Positive Pay, contact us about creating a file from your ACCPAC software to submit. 

Some other tips to help protect yourself from check fraud are:

• Sign checks with an ordinary old-fashioned ink pen. Use durable color ink. If you want to use a ballpoint pen, use a Bic pen with black ink. It seems that from studies, that you should be safe using these pens. If you are a ballpoint pen lover, switch to black ink when security is important. Among water-based inks, remember that gels are the most impervious. Do not hesitate to use your favorite fountain pen, just fill it with ink in one of the more durable colors and enjoy! 
  The Uniball 207 is specially designed to fight check washing www.uniball-na.com/main.taf?p=2,2,3
• Don't put envelopes containing outgoing checks in a residential mailbox. The red flag sticking up is like an invitation to a thief. 
• Ask your bank if you can pick up new books of checks. Or ask the bank to have a parcel delivery service deliver them. 
• Shred or burn canceled checks. If you need to save them, make sure the canceled checks are in a secured area, such as a bank lock box, or a wall safe. Don't throw them in the trash. 
• Check bank statements immediately after receiving them. If you fail to report check fraud within 30 days of receiving your monthly statement, the bank does not have to reimburse your loss (UCC Code 4-406). 
• Print a return address on an envelope. A signature can be traced, duplicated or forged. 
• Don't discard credit card records or bills with household trash. 

For additional information on check fraud, check the Internet at:
www.ckfraud.org/menu.html
www.schneier.com/blog/archives/2006/02/check_washing.html

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