By Shane Gibson, Security Bank Business Services
Check fraud can happen to you.
Check fraud is still a big threat to business owners and a common issue we continue to see.
Thieves steal checks from personal mailboxes and post office boxes, wash them, alter the name and then present them for payment at other banks. It’s an age-old trick still profitable to criminals, billions of dollars profitable. Thieves may steal checks to sale on the black market. They may alter checks and attempt to pay for goods and services. And, then there is the individual who writes a check knowing there isn’t enough money in their account to cover it. Some checks are more than a thousand dollars, which can cause serious financial loss to a business.
So how can you protect your business against check fraud?
I encourage my business customers to use electronic payment methods as much as possible to cut down on the amount of paper items in circulation and mitigate the risk of stolen items. There are a number of services that can help deter fraud, such as BillPay, automatic fund transfers, remote deposit capture and Positive Pay.
If your business is unable to go 100% checkless, then maximize your defense against check fraud with Positive Pay, which adds a layer of security to help you detect fraudulent checks before they are cashed on your account.
A proactive approach is your best defense against fraud
Positive Pay is great tool to help business owners avoid fraud and reduce the risk of financial loss. Unfortunately, too many business owners don’t take advantage of it until after they have been a victim of fraud. Or, if they do have Positive Pay, they are not daily reviewing and verifying check payments. Why risk financial loss when you can put up a defense to detect fraudulent items before they hit your account?
Positive Pay puts you in control of items paid on your account
Positive Pay is an automated cash management service that matches the checks your company issues with those it presents for payment. If a check is considered suspicious, it is flagged for your examination before it posts the payment. It allows you to review payments before they clear your account giving you the advantage of stopping potential fraud. It's like having a gate up in front of your account.
You are the gatekeeper
There are different ways Positive Pay works depending on your financial institution’s setup, but with any tool, you are the best defense against fraud.
Positive Pay is like putting up a gate in front of your account. You are the gatekeeper and decide what items you let pass through your account.
But understand, your gate is on an automatic timer set to open at a designated time each day. For Security Bank, the timer is set for noon, which means checks presented for payment will be paid after noon, unless you decline the payment.
How Positive Pay works
The Gate - Positive Pay
Positive Pay is conveniently managed through your online banking account. It matches check numbers, dollar amounts, account numbers and payee names against lists you provide. If an item doesn’t match; it is flagged as and exception, and you have the opportunity to accept or decline the item before it passes through your account.
For convenience, check items can be exported through QuickBooks or other accounting software and then easily uploaded to your Positive Pay approved list.
Remember, the gate is on an automatic timer.
The Gatekeeper – You
You receive daily notifications of all presented checks to your account along with exception items (items that do not match your list). You have a designated timeframe in which to review exception items and determine if they pass through your account or not.
The Automatic Timer
The gate - Positive Pay - is on an automatic timer. That means there is a daily time limit to accept or reject your exception items which varies per financial institution. Understand, if you do not take action before the daily cutoff time, items will post to your account. At Security Bank, the cutoff time is noon daily.
Positive Pay: Your Fraud-Fighting Ally
Positive Pay and other fraud prevention tools are designed to help you monitor for fraud and reduce your risk of potential financial loss, but there is no product that can guarantee 100% protection. You are the gatekeeper and are responsible for reviewing your account. Positive Pay is an added layer of security, but you are still the best defense against fraud.
- Examine checks closely
- Review presented items daily before noon
- Reconcile bank statements promptly
- Report suspicious activity immediately to your bank immediately
To learn more about Positive Pay and how it may benefit your business, give me a call, Shane Gibson, at 918-664-6100 or email me at sgibson@sbtulsa.bank.
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