06 Aug 2017

Avoid Check Fraud Perils on Your Journey Regardless of your Software Provider

0 Comment

As your practice chugs along, it is important to be aware of the risks facing businesses today – including the risk of check fraud.

Due to advancements in technology, criminals are finding more avenues to commit check fraud than ever before.

Learn more about this increasingly common practice and steps you can take to safeguard against it below.


Common Types of Check Fraud

The most common types of check fraud include counterfeiting and checkwashing:

  • Counterfeiting can include fabricating a new check or duplicating an existing check.
  • Checkwashing involves an attempt to erase and edit information on a check.

Other types of check fraud include forgery (issuing a check without proper authorization), forged signature (forging a signature on the front of a check), forged endorsement (forging a signature on the back of a check), paperhanging (purposely writing checks on closed accounts), and check kiting (opening accounts at two or more institutions and creating fraudulent balances.)

Tips to Avoid Check Fraud

Take measures to guard against check fraud by regularly taking the following actions:

  1. Confirm if your case administration software provides a check fraud protection service. For BMS clients, the check data in their case administration software is one of several information streams used to determine if a check is fraudulent or not. The BMS Banking Center serves as a second line of defense for BMS clients, ensuring that, even if a check is issued through a third party such as a payroll company, measures are in place to scan large-scale check distributions for the possibility of fraud. If your software provider does not provide this service, you may want to consider switching to BMS.
  2. Keep blank check stock and printed checks locked away. Blank check stock and printed checks should always be securely stored in a locked location lest they fall into the wrong hands. In addition, never leave your checkbook in your vehicle or out in the open.
  3. Do not send outgoing checks from your mailbox. Instead, physically deliver the check to the post office, hand it to a mail carrier, or drop it in a USPS mailbox. This will further protect the check from being illegally obtained by an outside party.
  4. Review images of checks that have been cashed on a daily basis. Every day, you should check your case administration software to see exactly what checks have been processed by the bank. This allows you to catch any fraudulent checks in a timely manner, void the check, and safeguard your account from further fraud.

What to Do If You Fall Victim of Check Fraud

If you discover a fraudulent check—a check that is fake or has the wrong recipient, amount payable or other information entered—inform your banking institution immediately. The more time that has passed after a check has been tampered with, the more opportunities the fraudster has to close the account before any funds can be recovered. In such events, BMS clients may contact the BMS Banking Center to advocate on their behalf – saving trustees valuable time and headaches.