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How to Combat Check Fraud for Your Business

Person holding paper and calculator | How to Combat Check Fraud for Your Business | DFS

Paying by check isn’t new, but it remains the payment method most often exposed to fraud. Check fraud is a broad term for several types of criminal activity that involve the illegal use of checks. Although the use of paper checks has been steadily declining for business-to-business transactions, they are still the most frequently used payment method, ahead of ACH transactions, credit and debit cards. A recent survey indicates that checks were the payment method most impacted by fraud activity, at 66 percent.

Fraudsters do their best to seem legitimate, using technology that is so sophisticated that it can make check fraud hard to detect. However, the right checks can increase efficiency and protection. At DFS, our extensive selection of business checks makes it easy for resellers to find products that meet your customer’s payment and cash management needs.

How can I secure my business checks?
Businesses can take steps to combat check fraud by using high-security checks, storing checks in a controlled environment, incorporating checks and balances, and taking advantage of Positive Pay services. DFS offers high-security checks that are trusted by financial institutions across North America and specifically designed with multiple layers of defense to help protect against fraud.

How Does Check Fraud Occur?

Criminals are opportunistic, and they may utilize a variety of schemes to perpetrate their fraud. Two of the most common check fraud instances include altered checks and counterfeit checks. With altered checks, a fraudster has generally gotten ahold of a physical check and altered the information, such as the names or dollar amounts, on the check. With counterfeit checks, criminals will attempt to create and use a check that appears as if it belongs to a company or other organization.

Technology has made it increasingly easy for criminals to create realistic fictitious checks, making check fraud one of the largest challenges facing businesses. Unfortunately, fraudsters look for companies that lack processes and technology to prevent losses. If a company doesn’t have a solid process in place to detect fraud, it may go on for a while.

How to Help Protect Your Business

There are several effective ways to guard your business against check fraud. Here are some best practices to consider implementing right away:

  • Use high-security checks – High-security checks are the best way to deter and detect check fraud.
  • Store checks in a controlled environment – Always keep your checks in a safe, controlled environment, preferably under lock and key, and away from signature stamps.
  • Incorporate checks and balances – Centralize check writing. Make sure more than one person handles accounts payable. Reconcile bank statements daily. Investigate check numbers cashed out of sequence and checks made out to “cash.”
  • Take advantage of Positive Pay services – These services have been identified as one of the most effective forms of defense against fraudulent checks. Positive pay is a service offered by many banks that uses automation to detect check fraud by matching checks presented for payment with a list of checks issued by the company and then highlighting any exceptions.
  • Stay one step ahead of thieves – Immediately notify your bank of changes in signing authorization. Require two signatures for large amounts. Set up a separate account for large dollar limits.

Even if check fraud has already affected your business, taking these steps to improve your processes can help protect your company from future loss.

Don’t Fight Fraud Alone

Even in today’s increasingly digital business world, checks remain a top payment choice for many businesses. From payroll to accounts payable, the right checks can increase efficiency and protection, helping you remain as secure from fraud as possible. DFS offers high-security checks that offer customers extra security that can prevent a crippling loss from check fraud. High-security checks are specifically designed with multiple layers of defense to protect against fraud.

DFS also offers further help with EZShield Check Fraud Protection Program® that will advance funds in the event of fraudulent activity, such as forged or altered checks. This service, combined with embedded high-security check features, enables you to keep business running as usual even if you experience fraud.

Help protect your business and mitigate the risk of check fraud with DFS, your best source for business checks. You can depend on DFS for checks and banking solutions to help you run your business smoothly and securely. Contact us today to be matched with a DFS business advisor.

Key Takeaways

  • Paper checks are still the most frequently used payment method, ahead of ACH transactions, and credit and debit cards.
  • A recent survey indicates that checks were the payment method most impacted by fraud activity, at 66 percent.
  • Businesses can take steps to combat check fraud by using high-security checks, storing checks in a controlled environment, and incorporating checks and balances.
  • From payroll to accounts payable, the right checks can increase efficiency and protection, helping you remain as secure from fraud as possible.
  • DFS offers high-security checks that offer customers extra security that can prevent a crippling loss from check fraud.

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