Catch Cheque Fraud Before it Catches You
- Recognize common types of cheque fraud.
- Establish a careful process to help stop cheque fraud.
Just one fraudulent cheque can cost you a large amount of money. Here are three tips to help you avoid being a victim of cheque fraud:
1. Recognize Common Types of Cheque Fraud
- Counterfeiting – Fabricating or duplicating a cheque.
- Alteration – Modifying the amount or payee on a legitimate cheque.
- Forgery – Stealing and then endorsing cheques.
- Paperhanging – Writing cheques against a closed account.
- Cheque Kiting – Creating fraudulent balances by passing cheques between two or more accounts and using “the float time” to obtain unauthorized credit from each bank before a cheque clears.
2. Avoid Risks in Your Dealership
- Lock up your cheques, deposit slips, bank statements, and cancelled cheques.
- Set your security restrictions to limit access to information, systems, accounts, and records to appropriate employees.
- Educate your employees about company policies and the consequences of fraud.
3. Establish a Careful Process to Help Stop Cheque Fraud
- Submit the cheque-issue data file from ERA in your bank’s specific format and electronically transfer the file to your bank on a daily basis. Or you can automate this process with Reynolds Positive Pay, an integrated tool which would eliminate the risk of missing cheques and rekeying errors.
- Most banks will compare all cheques presented for payment with the data from your cheque-issue ERA file.
- If they find an exception, the bank will notify you for cheque verification.
Follow these steps to help you avoid being a victim of cheque fraud.