Check Fraud: Not if it Will Happen But When...

Jan Sheridan, Vice President—Treasury Management

June 26, 2013

Building Your Business

Articles

According a 2013 survey*:

  •  Sixty-one percent of organizations were targets of attempted or actual payment fraud
  •  Checks and ACH debits were the most frequently used vehicles for payment fraud.
  •  87% of all respondents reported checks as the method utilized.
  •  The typical loss due to payments fraud was $20,300

Union Bank’s Positive Pay is designed to stop a problem at the time of presentment.

Of those organizations, 67% reported that positive pay or reverse positive pay was the tool that prevented financial loss.

It’s startling that each day 175,000 fraudulent checks are presented with dollar amounts of approximately $41 million.  Although the use of checks is declining for business
payments, 75% of businesses still use checks for business to business payments.

How can Union Bank help protect you against fraud, temporary loss of funds, or even the outright theft of vital company revenues? Positive Payment is the answer.

Why take the risk?

Positive Pay provides fraud control by comparing your issued checks against those presented for payment each day and reports any discrepancies.  You are immediately aware of any exceptions or discrepancies that could lead to fraud losses or disruption of payments to your vendors or customers.  Each day checks are issued, simply consolidate your check-issued files and send the information to us through Business Banking Online.  Positive Pay will match the items presented for payment against your check-issued file.  You are notified if there are any exceptions allowing you to determine whether to pay or return.  It takes just a few minutes to dramatically increase account security.  A daily report is also available of all current outstanding checks, adding detail and control to your check payments.  Positive Pay significantly increases the likelihood of identifying a fraudulent checks or payment errors by looking for: 

  • Duplicate check numbers
  • Different check amounts
  • Altered account number
  • Unreadable MICR lines 

Reverse Positive Pay provides your company with daily paid check information in an electronic file that can be matched against your check issue file.  This file can be retrieved in a number of formats through Union Bank’s Business Banking Online 

Both services allow you to get timely account and payment information to help protect your company against possible check fraud.

Doesn’t the bank cover any loss to my account?

Union Bank employs a variety of protections to ensure that your funds and account information remains secure.  However, that answer depends on the nature of the loss but at a minimum can include legal costs and delayed access to vital funds. 

Often business owners tell us check fraud has not been a problem or they don’t want to take the time to implement Positive Pay.  Once established, the system requires only minutes each time you issue checks and action only needed on those days you are notified of an exception. A small investment can prevent potential liability by the amount of your account balance. 

If you would like to learn more about Positive Pay, please contact Union Bank’s Treasury Management Services Department at 402.323.1557. 

*Survey conducted in 2013 by the Association for Financial Professionals (AFP)

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.