Despite using caution and care when transmitting account information, Deposit Account Fraud continues to be a major issue in the banking industry. Checks are written daily for everything from payroll and accounts payable to personal checks for mortgages, rent and utilities and according to the American Bankers Association’s Deposit Fraud Survey from 2013, 37% of fraud against deposit bank accounts is from check fraud. Losses on an annual basis range from $600 to $800 million.
There are many different ways to guard against being responsible for a part of the hundreds of millions of dollars lost each year. Among them are:
- Make sure you notify the bank of any unauthorized payments within thirty days.
- Ensure unauthorized signatures and alterations to a payment are reported to the bank within one year after its appearance on a bank statement.
- Know who you are paying. Do you have an EIN or SSN in relation to the payment?
- Exercise ‘ordinary care’ in guarding against alteration or forgery.
When using checks, many banking institutions require you to prove you have exercised ‘ordinary care’ to prevent alterations and forgery. One way to do this is by occasionally changing the security features on your checks. This demonstrates to your bank that you are taking the ‘ordinary care’ they require to avoid loss from fraudulent use of your checks.
Nelco can assist you in guarding against alterations and forgery. According to ANSI standards all checks should have at least 3 security features. Nelco uses multiple combinations of 12 security features to create three levels of security. Even our Essential Line of checks possess 6 different security features. Nelco designed this line for companies who have a low risk of check fraud. For customers that require higher levels of security, Nelco has two additional security levels that include added security features to reduce your risk of fraud.
You can find more information about Nelco’s checks along with a complete list of guaranteed 1099-etc compatible checks at: 1099-etc Compatible Supplies -Nelco.