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Preventing business check fraud

Preventing business check fraud

Even with the increased use of electronic payments, older payment options like checks are still used. Checks have been around for years, and crooks have mastered the art of stealing and counterfeiting them. Altering or counterfeiting checks with stolen information is an easy crime for the low-tech criminal, but it’s a risk that can be reduced by following these tips for preventing check fraud:

  1. Use consistent check stock and issue checks in sequential order. This makes irregularities stand out more and makes them easier to detect.
  2. Keep check stock and deposit slips secure at all times. Don’t leave banking information or checks unattended to assist customers or vendors. Void and destroy old checks and statements.
  3. Have separate individuals who issue checks and reconcile accounts. Regular audits, along with checks and balances, will help prevent internal employee fraud.
  4. Reconcile accounts promptly. Sign up for Business Online Banking, where you can manage transactions and set up alerts for account activity.
  5. Don’t place checks in an unsecured outgoing mailbox. Never put the red flag up for outgoing mail, as it shows thieves there is something available for them to steal. Instead, place outgoing mail in a secured Postal Service mailbox or, better yet, switch to using Bill Pay.
  6. Switch from issuing payroll/vendor checks to automatic deposits/electronic funds transfers via ACH. Our Treasury Management team can assist with getting your business set up to send or receive payments via ACH.
  7. Use Positive Pay. This is a free fraud mitigation tool that we provide to your business at no charge. As checks are presented for payment, they are compared to the list of issued checks that you have provided to the Bank. If there are any discrepancies, the check(s) are flagged for review prior to payment. Contact our Treasury Management team for more information.

If you are the victim of check fraud, contact us immediately at (605) 335-5200 so we can begin looking into any suspicious activity. File a report with local police and, if it involves mail theft, contact the US Postal Inspection Service.

Sioux Falls Police Department: (605) 367-7212

US Postal Inspection Service: 877-876-2455

Federal Trade Commission (FTC) Fraud Prevention Guide for Businesses

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