Worried About Check Fraud? Here’s an Economical, Secure Solution for Printed Checks

14 Feb Worried About Check Fraud? Here’s an Economical, Secure Solution for Printed Checks

According to a recent survey by the American Bankers Association, check fraud attempts nearly doubled in a two-year period, from 8.5 billion in 2016 to $15.1 billion in 2018. With this dramatic rise, small and medium businesses face increasing pressure and challenge to keep up with strict privacy and security regulations, while simultaneously managing complex data, and offering timely, economical business-to-business payments. For many of these businesses, switching to electronic payments, requiring costly integration into existing infrastructure, is not a viable option. Printed, mailed checks remain the payment method of choice for these businesses.

In the past, most companies printed checks in-house, on a laser printer, using Magnetic Ink Character Recognition (MICR) check stock pre-printed with the company name, check number, and account information. Secure MICR is required by the Federal Reserve to be printed on the bottom of all checks. Checks were manually inserted into envelopes, postage applied, and mailed. This process leaves many opportunities for check fraud.

Large businesses with more than $1 billion in revenue have many options to securely store, process, maintain, and integrate sensitive account data and financial records necessary to process electronic payments. These records are subject to GLBA regulations, privacy regulations such as the California Consumer Privacy Act, and a host of security standards such as PCI-DSS for credit card account data. Small and medium companies, with limited budgets, must dedicate their resources to protecting revenue-generating data. There are economical options, however, to secure printed, mailed checks.

Instead of pre-printed stock, a printer using MICR ink and toner can be used to create checks from blank check stock, which is not as vulnerable to fraud since the checks are encoded with MICR at the time they are printed.

When checks are generated, providing the bank with a Positive Pay data file helps the bank know which checks are valid, therefore making it much more difficult for criminals to fraudulently present checks on protected accounts. But those checks, when mailed, are still vulnerable to mailbox thieves. The USPS offers Destination IMb Tracing™ and Intelligent Mail® services that can track mailpieces all the way through processing to delivery, which helps thwart mail thieves and reduce check fraud.

Procuring and operating secure MICR printers, and maintaining the infrastructure to use USPS Intelligent Mail® barcodes is beyond the scope of most businesses, so it makes sense to partner with an outsourcing professional who can provide these services. DATAMATX specializes in cost-effective solutions for securing check payments.

We offer a wide range of check printing services, including payroll, A/P, claims, refund and rebate, as well as direct deposit advice, purchase orders, and invoices. Our services adhere to applicable check printing standards and regulatory requirements and are SOC1/SSAE-18 compliant. Our check payment services include several features that mitigate the risk of fraud with extensive check security at the user, software, hardware and printer levels, including:

• IMb tracking
• MICR printing
• E-approval of check files
• Automated file-level reporting
• Custom reporting and creation of Positive Pay bank files
• Secure storage with video monitoring and key card access that comply with NIST 800-53 physical access controls
• Total Quality Management (TQM) secure processing environment
• On-premise shredding (damaged checks never leave our secure controlled environment until the shredding process is complete).

DATAMATX’s check processing services are helping our customers reduce transactional and operational costs and increase the efficiency of check payments. Some of the conveniences we offer include:

• Customizable format at piece level to streamline multiple divisions into a single batch
• Customizable formatting by batch on registry details
• Customizable check summary
• Same day pulls
• No voids

As criminals develop new methods for committing fraud, securing payments is more challenging than ever. Checks remain a cost-effective and secure method for most small and medium businesses. Partnering with DATAMATX gives these businesses full secure check processing capabilities at an affordable price point.