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Even as check volume declines, check fraud loss is increasing – affecting the bottom line of small and large businesses alike. Check fraud takes so many different forms and is an easy form of ‘hit and run’ crime. Often, investigators are not able to determine who counterfeited a particular batch of checks that generated large losses. The responsibility starts with the business to maintain sound practices.
Based on the Uniform Commercial Code which governs check liability in most states, businesses are at risk for loss if they do not maintain reasonable standards, fail to safeguard or do not respond or notify promptly. The risk of loss from check fraud is substantial and it is important that businesses and their bank work together to prevent check fraud. If a fraud occurs, your bank is able to assist you and your company through the fraud investigation and resolution process.
Use this Best Practices Checklist to rate your level of Protection:
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Check Fraud Checklist |
Yes |
No |
Unsure |
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We separate disbursement & reconciliation duties |
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We use high-quality check stock with built-in security features |
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We keep checks, deposit slips, bank statements and cancelled checks in a secure area |
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We follow an established employee order/reorder policy for stock that includes dual controls |
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We have controlled access to payments processing areas |
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We reconcile checking accounts daily |
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We have separate accounts for check and electronic payments |
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We process payroll with direct deposit or payroll cards |
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We employ Positive Pay fraud protection measures |
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If you answered "No" to more than one question, your Check Disbursement & Reconciliation Practices should be re-evaluated to keep up with the current fraud environment.
Contact Park Bank for a complimentary review of your practices. We'll provide customized recommendations to improve your processes.
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