The best way
we’ve found to explain the difference between
laser check security features and Positive Pay, and
the importance of having both, is to draw an
analogy between two popular vehicle anti-theft
devices: LoJack® and The Club®.
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Think of
Positive Pay as a LoJack® system for
your business checks. When trying to steal a car, a thief
has no idea that it is equipped with LoJack®. They steal the car, and authorities use LoJack®
to track it down after the fact. In much the
same way, a thief who tries to copy or alter
your check has no idea that it is “equipped”
with Positive Pay. When the
fraudulent check
makes it to the bank to be cleared,
it is verified against the Positive
Pay file, and if the check number
and amount do not match the
information on the file, payment on
the check is stopped. |
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Click here to request samples of our
Secure
Check Stock. |
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Document Security
Features are
"The Club" for your Check Stock |
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Approximately 95% of all stolen cars equipped
with LoJack® are recovered, compared to an
overall recovery rate of just 61%. Still,
there is the initial inconvenience of having had
your car stolen, not to mention any damage that
may have been done by the thieves prior to the
vehicle’s recovery. Similarly, attempts to pass
fraudulent checks from your bank accounts
protected by Positive Pay are much more likely
to be detected at the bank, but the system is
still far from foolproof.
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For example, many
Positive Pay programs do not look at the
Payee Name, meaning that the name on the check
can often be altered without being detected.
Also, a fraudulent check that is cashed at a
bank other than the one on which it is drawn can
be cleared initially, causing at the very least
a headache for the account holder, even if they
are not ultimately held financially responsible
for the fraud.
Now consider physical
security features – such
as warning bands, copy-void pantographs, and
chemical reactivity - actually built into your
check stock. Having
these security features is
akin to putting The Club® on the steering wheel
of your car, in that they act as a deterrent to
attempts at fraud. A thief who tries to alter or
duplicate a
check that has security features on
it will have a much more difficult time of it
than they would with a non-secure check. For
this reason, experienced thieves will often
leave such checks alone, targeting those that
are more vulnerable due to a lack of security
features.
Just as a thief can still steal a car that is
equipped with The Club®, they can also copy,
forge or alter a check that has security
features. However, vehicles equipped with The
Club® are four times less likely to be stolen
than those without it. Like The Club®, no
document security feature can prevent all check
fraud, but the fact that they deter many thieves
is inarguable. |
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