Check 101: Basic Tips For Avoiding Check Fraud

1. Ordering Financial Supplies

   ·	Order all checks, deposit slips, and banking related items from a reputable source. Be sure to follow up immediately if you do not receive your order within the specified amount of time, contact the printer to verify shipment. If the items have been sent and are suspected to be lost in transit and/or missing, contact your financial institution immediately.
   ·	Be sure checks include the appropriate security features. Features to look for on the front of the check include chemically sensitive paper, erasure protection, a padlock/icon warning, & microprint signature line. The back of the check should contain a warning box and security screen. These elements will help to avoid the possibility of counterfeiting and alteration.

2. Storage & Accessibility To Financial Documents
   

   ·	Avoid easy access to your banking documents by unauthorized personnel. Maintain the physical security of your banking documents (checks, deposit slips, statements, etc.). Be sure to secure blank checks and to shred any leftover deposit slips after all checks in that booklet/catalog have been used. Also shred any financial statements you wish to discard.
   ·	Limit the number of individuals who have access to your checks. Do not leave your financial & banking information unattended (even if you are assisting a customer).

3. Storage & Accessibility To Financial Documents
   

   ·	Due diligence pays off, so be sure to know who you are hiring. Conduct a full background check on employees handling inventory and financial information/money for your business. Be sure to verify past employment, education, references, certifications (if specified), and criminal records. Drug screening may also be applicable in some cases.
   ·	Follow employee departure guidelines. Change the locks on your facility when an employee leaves the organization. Additionally, former employees should no longer maintain authorization to conduct any business behalf of your organization. Remember to promptly contact your financial institution and other relevant suppliers to update records for any authorized usage and signing authority on your account(s).

4. Business Process Recommendations
   

   ·	Create a fraud policy. Be sure all employees are informed and understand that there is zero tolerance for fraud. Teach your employees regarding what should be done if they suspect fraud and be sure they understand the steps that will be taken by the organization if it is discovered that fraud has been committed.
   ·	Ensure accounts payable functions are maintained by more than one individual whenever possible. Each person should be responsible for different payment disciplines in an effort to ensure checks and balances are in place. Additionally, check writing and account reconciliation should be completed by different individuals. This will help to discourage and possibly avoid tampering with the financials and/or the checks.
   ·	Limit the number of authorized signers on your account. The fewer the number of signers, the less chance there will be for a problem. It is suggested to require more than one signature for checks that are for large dollar amounts.
   ·	Reconcile your account regularly. Early discovery of fraudulent activity is important, as you will be more likely to recover your losses
   ·	Communicate with your financial institution when you have had an organizational change. Be sure to alert your financial institution when you have a change in your business process or personnel.

5. Check Writing Tips
   

   ·	Pay special attention to spacing. Avoid leaving a space between the dollar sign and the written number to keep the check from being altered. Also, keep names and written amounts to the left as far as possible.

6. Check Receipt
   

   ·	Determine the types of checks your business will accept such as personal, 2-party, payroll, government, and traveler's checks. A good rule of thumb is to always require 2 forms of identification for all personal checks, of which one should include a photograph. Verify that the customer's identification is current and that the signature matches the name printed on the check. Please take extreme caution when accepting starter/temporary checks.
   ·	Closely examine the checks received from your customers. Look for misspelled words such as street names, towns and zip codes that do not match appropriately, typewritten names and/or addresses, and checks hat do not match the customer identification. Verify the written and numerical amounts match accurately. Also pay notice to the physical weight, texture, and color of the check itself.
   ·	Look for early warning signs. If you are a retail business or if you receive checks from customers in person, pay attention to the customer's behavior & ensure your staff knows what to look for. Be cautious of people who take a little too much time or care when signing their name. The individual may also try to create a distraction while they are signing the check or while you're reviewing the check for accuracy.

7. Recourse Against Bad Checks
   

   ·	Erroneous checks include those that are counterfeit as well as those written with insufficient funds in the account. Small businesses can go after the individual by phone, certified letter or resort to collections agencies and law-enforcement agencies for additional assistance.

8. Be On The Alert For Scams
   

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   Network with other businesses to learn about recent fraud situations in your area, as thieves may target a particular geography prior to moving along. Examples of common scams: · Beware of providing any personal information over the phone. Never provide your checking account number and information over the phone for a "pre-approved" credit application. · Remain cautious when receiving offers via standard mail. Your business name and address may have been discovered via the internet or a business directory. Do not deposit the check which states "please cash our check" in the introductory letter which amounts to a very nominal amount such as $4.23 or other. Upon doing so, the information on that cashed check is returned to the person running the scam verifying your checking account number and other information thus allowing them to write demand drafts on your checking account.

9. Use Common Sense
   

   ·	If something doesn't feel right to you, there is probably a reason for it. Take the extra time, probe & ask the right questions. This will help to protect you and your business financially.