| Last week while speaking at the Young | | | | authorized and issued by the company. All three |
| Presidents' Organization, I spoke about Positive | | | | components of the check must match exactly or |
| Pay and wanted to share with you what Positive | | | | it will not pay. |
| Pay is and how it can help everyone prevent | | | | How Does Positive Pay Work?? |
| fraud against their business'. | | | | Positive Pay requires the company to send |
| An insurance company in Branchville, NJ is singing | | | | (transmit) a file of issued checks to the bank |
| the praise of the Positive Pay Service after a | | | | each day checks are written. When those issued |
| bank teller uncovered an alleged scheme to | | | | checks are presented for payment at the bank, |
| defraud the company of at least $8,000. | | | | they are compared electronically against the list of |
| The attempted fraud was discovered when an | | | | transmitted checks. The check-issue file sent to |
| individual presented a check for cashing at a bank | | | | the bank contains the check number, account |
| branch in South Carolina. Neither payee name nor | | | | number, issue date and dollar amount. Sometimes |
| amount on the check matched the Positive Pay | | | | the payee name is included, but is not part of the |
| file provided to the bank by the insurance | | | | matching service. |
| company. As it turned out, the check had been | | | | When a check is presented that does not have a |
| stolen and altered by $8,000. Thanks to quick | | | | "match" in the file, it becomes an "exception item". |
| action by the bank, the individual was arrested on | | | | The bank sends a fax or an image of the |
| the spot. | | | | exception item to the client. The client reviews |
| What is Positive Pay? | | | | the image and instructs the bank to pay or return |
| Positive Pay is an automated fraud detection tool | | | | the check. |
| offered by the Cash Management Department of | | | | There is generally a fee charged by the bank for |
| most banks. In its simplest form, it is a service | | | | Positive Pay, although some banks now offer the |
| that matches the account number, check number | | | | service for free. The fee might well be considered |
| and dollar amount of each check presented for | | | | an "insurance premium" to help avoid check fraud |
| payment against a list of checks previously | | | | losses and liability. |