Check Washing Schemes Are on the Rise
In today’s digital age, scams and other criminal behavior seem to garner additional news headlines every day, making careful stewardship of your digital financial security of the utmost importance.
While many individuals and businesses have embraced electronic payment methods, it’s important to remember that physical checks still remain a significant – and also vulnerable – form of payment.
One prevalent and persistent threat is “check washing”. This criminal act can have devastating consequences for commercial accounts. Fortunately, Fieldpoint Private employs a powerful tool called Positive Pay that can help safeguard your finances.
Understanding Check Washing
Check washing is a form of fraud where criminals attempt to alter the details of a check, most frequently by erasing the ink on the check using chemicals or other techniques. Once the ink is removed, the fraudster can then simply change the date, recipient’s name and check amount to their liking.
Subsequently, when the modified check is cashed or deposited, the funds go to an unintended recipient, resulting in financial loss and an administrative headache for the victim, including potential legal issues, unwarranted fees and even hits to an account holder’s credit score.
Risks for Commercial Accounts
For check washing criminals, commercial checks are coveted targets, due to their larger transaction volumes and higher balances. Within that group, businesses that issue a large number of checks are of particular interest to fraudsters because they assume the larger check volume means lax controls resulting in more successful schemes.
Positive Pay Reduces the Risk of Check Washing Fraud
Fieldpoint Private employs the Positive Pay service, which enables you to identify and prevent payment on fraudulent items. The service matches check data you or your administrators enter against the data associated with each check presented for clearing. This includes details such as the check number, date and exact amount of the check.
When an exception item is identified, you or your team members are notified and make a pay/return decision before those items are paid and funds disbursed. This service stops payment from going to an unintended recipient, all according to your issued “check items” upload via Fieldpoint’s commercial online banking platform
As powerful a tool as it may be, Positive Pay should be considered a first line of defense only. No tool is perfect, and it is important that businesses maintain reasonable vigilance on all fronts to keep their funds as safe as possible. Within Positive Pay, carefully review all items and validate thoroughly before paying. Ensure the default setting for presented items is “return,” not “pay.”
Put Positive Pay in Place to Protect Your Accounts Against Fraud and Loss
Protecting your financial well-being is always a top priority for Fieldpoint Private. We work across multiple fronts to help protect you against fraud, including transaction screening and verifying suspicious activity. Nevertheless, check washing scams can be a serious threat to your commercial accounts.
Employed robustly, Positive Pay can significantly reduce the risk of a successful check washing scheme against your accounts, reducing the threat of money loss, potential legal complications, fees and negative impacts on your finances and credit.
As an added courtesy, Fieldpoint Private will notify you if exception items (checks) presented have not been “decisioned” to pay or return by the cutoff time. This is just another example of our dedicated service. You have the capability to ‘decision’ items from your desktop or phone app. Notifications can be received in three ways: email, text or desktop.