Prevent Business Check Fraud with Modern Solutions

The myth that check printing is dead is not reality. And, if you're reading this, there's a solid chance you still print checks. A full 95% of business leaders state that checks are still their number one choice for making payments.1

Business check fraud is a legitimate risk to any small business, enterprise organization, or even financial institution writing checks. Yet, most businesses do not have the proper solutions in place for check fraud prevention.

The Unrealized Threat of Check Fraud

70% of business execs are concerned with the cybersecurity risks of online banking portals, yet less than 10% cite management of check fraud as valuable.

There is a resounding lack of awareness that check fraud even exists in a business environment. 74% of organizations experienced check fraud last year with no sign of decline.2

That means businesses need to be more proactive to help prevent loss before it occurs.

The loss associated with check fraud is multi-faceted. Financially, the loss costs between 0.5% and 1.5% of total revenue. Plus, the impact fraud has on employees and consumers and loss of brand reputation.

Have You Considered Insider Risks?

Internal controls are mission critical to a proactive solution. Misappropriation of assets represents 89% of occupational fraud and 12% of that is check and payment tampering.3

Small businesses are at a greater risk (22%), compared to only 8% of companies with over 100 employees.

The departments committing check and payments fraud, most often, are the folks who have the most access to payment solutions:

  • Accounting - 30%
  • Finance - 16%
  • Executive/Management - 15%
  • Administrative Support - 14%

In 32% of cases, lack of internal controls made it easy for check and payments fraud to be committed. The ability to override set protocols was to blame 18% of the time.

"Part of the problem is that businesses are actually backing off from investments in internal controls that could prevent fraud."4

This further confirms the lack of awareness for check fraud. Businesses recognize the need for tighter cybersecurity due to constant awareness and news commentaries about breaches and data theft. While much of the check fraud news comes from consumer-related fraud, not B2B.

Digital Technology Means Less Checks? Which Means Less Check Fraud, Right?

There is belief among companies, and some consumers, that paper checks are dead. So, when planning security solutions, executives are dismissing check and payment security as a risk… because if digital technology is replacing checks, that means less checks, which means less check fraud, right?

"With the continued proliferation of online and mobile banking and the phased, yet inevitable adoption of EMV, check fraud looks all the more attractive - especially to those who have specialized in this type of fraud in the past." 5

We're already seeing double-dipping on mobile check deposits as users are depositing the check electronically and taking it to the bank to deposit in person. This technology may make it more difficult to recognize alterations.

Check fraud is becoming easier due to lack of awareness and security measures in place.

What are Your Next Steps?

Whether you run a financial institution, a university, a small business, or a large enterprise, the first step is to assess your current check and payment workflow process. Inspect potential gaps that could be leaving your company exposed.

If you're using preprinted stock, make the switch to blank check paper. Checks with a preprinted MICR line (the bank routing and checking account) are a high theft risk, both internal and external.

"Check fraud continues to be the most common type of payment fraud, as paper checks remain a commonly used method by businesses. Fraudsters can acquire unsecured check stock directly from the business or intercept mail to get a check that they will chemically wash to alter the payment information."7
  • Assess your printer and the toner used. Are you using a reliable MICR printer, or just an off the shelf laser printer with no additional security?
  • What about the toner; is it MICR toner and if so, does it have anti-tamper technology?
  • Consider your software; does it have positive pay and auditing/reporting functionality?
  • Does your software and printer allow you to print additional anti-copy, anti-alteration watermarks?
  • Are digital signatures locked down for access only by authorized personnel?
  • And, think about the end user. If you run a financial institution, are your customers protected from their checks being altered?
"Check security - especially for your high value, loyal check writers - is very important to guarantee customer satisfaction and protect your financial institution's bottom line." 8

The Key to Preventing Business Check Fraud is Modern, Secure Solutions

The lack of awareness for check fraud is alarming. The explosion of digital technology isn't mimicking a reduction in checks, nor a decrease in check fraud.

After you assess your current check printing process, the key is to implement modern, secure solutions. To learn more about the complete check printing solution, check out this infographic.

Help us raise awareness by sharing this information. Let us be your partner to prevent check fraud.