The Check Is in the Mail — Or Is It?
Check fraud can result in significant financial losses; therefore, it is crucial for businesses to implement effective strategies to safeguard against this type of fraud.
Mail theft is a common occurrence, which means businesses across the nation are dealing with increasing levels of check fraud. Fraudsters will often steal checks from the mail, including from postal drop boxes. The fraudster can then alter the check, create a new counterfeit check or even steal your identifying information to negotiate a legitimate check.
One of the most important ways businesses can protect themselves from check fraud is by implementing Positive Pay. Positive Pay is a service offered by many financial institutions, including MidFirst Bank, that allows businesses to electronically submit a list of checks they have issued. The bank will then compare any checks presented for payment against this list, flagging any discrepancies for further review.
Another key strategy for businesses to protect themselves from check fraud is to closely monitor your vendor payments. It is important to note that a check clearing an account does not guarantee the payment got to the intended vendor or individual, particularly when the check was placed in the mail. Businesses should follow up with their vendors regularly to ensure payments are received and processed correctly.
Switching payment methods to electronic means can also help businesses reduce their risk of check fraud. Electronic payments, such as ACH and wire transfers, are generally more secure than checks and less susceptible to fraud. By transitioning to electronic payments, businesses can streamline their payment processes, reduce the risk of errors and enhance their overall security posture. If a check must be mailed, the business should consider using FedEx or certified mail to ensure the check reaches the destination appropriately.
Ultimately, protecting against check fraud requires a multifaceted approach that combines technology, policy and employee awareness. In today's increasingly digital and interconnected business environment, safeguarding against fraud is more important than ever. By taking proactive steps to protect themselves, businesses can safeguard their financial assets, reputation and long-term success.