| YOU COULD BE ON THE HOOK! | | | | color copier. |
| Did you know that the UCC (Uniform Commercial | | | | * Checks that are easy to tamper with. |
| Code) regulationsplace responsibility for forgery | | | | * Easy access to checkbook or check stock. |
| losses partially on bankcustomers, rather than | | | | WHAT CAN I DO TO PROTECT MYSELF? |
| solely on the banks? But in addition tothis | | | | By protection, I mean reducing the chance of |
| exposure, there can be significant expenses and | | | | someonecounterfeiting or altering your checks, as |
| lost timeinvestigating the crime, not to mention | | | | well as reducing yourliability when it occurs. |
| damage to yourcredibility and reputation. | | | | Be aware that is is impossible to prevent fraud. |
| Your only defence is to show that you have | | | | But you cansignificantly minimize the risk using a |
| taken due diligence. | | | | two-prong approach. It iscritical that good |
| One way to demonstrate this is by implementing | | | | procedures related to your check processingare |
| careful practicesregarding your checks. Another is | | | | put in place, and that you use a check that is |
| to use checks with wellimplemented security | | | | difficult tocounterfeit or alter (see sidebar). |
| features. | | | | * Reconcile your bank statement promptly. Now |
| HOW BAD IS THE PROBLEM? | | | | that bankstatements are available online, you can |
| The problem is so serious that the banks don't | | | | do this as frequently asyou feel is necessary for |
| like to reveal theextent of the problem. Estimates | | | | your situation. |
| range from hundreds of millionsto 10 billion dollars | | | | * Restrict access to your checkbook/check |
| annually. | | | | stock. Ensure that onlytrusted staff that need |
| In 1991, the FBI tracked over 26,000 cases, but | | | | access have it. |
| this is just thetip of the iceberg, because the FBI | | | | * Audit your checks. However, this can be difficult |
| mostly focuses on cases wherethe amount | | | | because oftenchecks are removed from the |
| exceeds $100,000. Just one example comes from | | | | bottom or middle of the book orstack. |
| The | | | | * Use a custom design. While this isn't an |
| Green Sheet (a publication to the Financial | | | | affordable option formany businesses, look into it. |
| Services Industry),reporting an incident where a | | | | The next best thing is to ensurethat your check |
| family had allegedly stolen morethan $1 million | | | | supplier uses comprehensive security features. |
| from area merchants since 1993 by writing | | | | Remember though that a custom design is not a |
| checkson closed and non-existent accounts at 11 | | | | substitue forsecurity features. |
| financial institutionsin Indiana and Chicago under 25 | | | | * Advise your bank branches' officials of the |
| different names. | | | | security featuresin your checks .. in person or in |
| In just 4 years, Northern Trust Bank has | | | | writing (and keep a copy of theletter on file!). |
| detected more than 3million dollars worth of | | | | * If you issue a large number of checks, |
| counterfeit checks. | | | | particularly with a lowamount (eg. rebate checks), |
| WHAT KIND OF THINGS DO CRIMINALS LOOK | | | | open a separate account and alert thebank staff |
| FOR? | | | | of an upper limit for that account. |
| It is an endless list, but here are some of the | | | | THE BOTTOM LINE |
| types of thingsthat someone looking to | | | | Don't take unnecessary chances. The more |
| counterfeit or tamper might look for: | | | | security you havethrough procedures and choice |
| * High volume bank accounts where a fraudulent | | | | of check form, the less likely thatsomeone will |
| check can easilyslip through. | | | | tamper with your checks. |
| * Checks that are easy to reproduce using a | | | | |