Financial Services Review: Specials Magazine

Despite the increasing prevalence of digital payments, check fraud continues to be a significant concern for financial institutions. Take, for example, a $3 check written at a correctional facility—this seemingly minor act set off a chain reaction that nearly resulted in financial disaster. At first, it was just a minor inconvenience. A former inmate cashed a small $3 check, and somehow, the amount ballooned to $300 by the time it reached the bank. Then it happened again. And again. And again! No matter how often the correctional facility’s financial team changed their checking accounts, the fraudsters were always one step ahead. Even though they thought they had plugged the loophole, another altered check slipped through, bleeding money from the system. The problem was never-ending, frustrating, and—worst of all—entirely out of their control. The local bank handling these transactions then dialed Cheque Guard, the ultimate solution for check fraud. The company’s secure check fraud prevention system helps small to medium-sized banks and financial institutions protect against fraud, streamline check issuance, and enhance security in financial transactions. Cheque Guard rolled out its state-of-the-art system, ensuring every check was authenticated, secured with encrypted barcodes, and embedded with advanced security markers—making alterations virtually impossible. Next, it enabled instant verification at the bank to ensure that the moment a check was presented, its authenticity was confirmed. This eliminated any chance of a $3 check being inflated to $300. Finally, the system provided fraud detection at the source and stopped fraudulent transactions right at the teller’s window instead of catching them after the damage was done. With this solution in place, the county no longer had to change its accounts constantly, the bank could verify checks in real-time, and the financial team could finally breathe easy. Instances like this is not one off. Check fraud comes in different forms, such as counterfeit checks, altered checks, forged checks, stolen checks, check kiting, remote deposit fraud, and business check fraud. “As fraudulent tactics become more sophisticated, financial institutions need to leverage a range of fraud prevention tools and tactics to combat it, and Cheque Guard leads the charge in this fight,” says Emil Ramzy, founder and CEO. While Positive Pay is very effective, it does have limitations. Here are some reasons why positive pay might not be completely effective in combating check fraud. Lack of customers participating due to difficulty of generating the issue files, most accounting systems fail short of making the preparing the issue file easy step for common users. Also, timely reply to the exceptions, businesses need to submit their decision to the exceptions, making Positive Pay an incomplete fraud prevention tool. Cheque Guard offers the Next Generation Positive Pay, that requires no issue file nor file transmission.