Fraud Protection Best Practices for Check Handlers
Store blank check stock and cancelled checks in a secure location and limit access to only specific employees authorized to handle check payments.
Keep outgoing checks in a safe place prior to mailing, and use a locking mailbox or P.O. Box for incoming mail.
Review and reconcile account activity daily. The passage of time might adversely affect the potential recovery of a fraud loss or the outcome of a customer claim.
CoBank's Positive Pay service helps protect against the payment of altered and counterfeit checks. In the "standard" Positive Pay approach, a customer uploads an electronic file with issued check information to CoBank each day. As checks clear, CoBank matches them to issued check records by date, check number and amount. There is also an option to match check payee names. Any mismatches are identified as exceptions for the customer to review and decision online before the daily deadline. "Reverse" Positive Pay is an alternative for customers not able to upload check issue files. This service provides the customer with online images of all checks clearing each day. The customer reviews the images and indicates the decision to "pay" or "return" each item.
Consider using alternative payment methods such as wire transfer or ACH instead of checks. These types of electronic transactions are cost-effective, efficient and much more secure than traditional checks. CoBank also offers an ACH Fraud Control Service for cash management customers.