Post Office Mail Theft

The vast majority of companies mail checks in glassine window envelopes. The payee name and address appears through the window, as does the background of the document. It is obvious to anyone that a check is inside the envelope.

Laser printing can provide an easy alternative to telling people in the mail loop that they are transporting checks. The solution is simple, requires only minor operational changes, and costs almost no money. Print the payee name and return address on one of the blank white panels of the check form. To anyone in the mail distribution system, the envelope appears to contain a letter or invoice, but not a check.

Implementing this change will require some minor programming of the software system, but any expense for re-programming, which ought to be minimal because the "fix" should become part of a standard upgrade in the next software release, is well worth the money. In cases where the white panel is currently being used as a file copy, the software can print the information on a blank sheet of paper pulled from a second tray. Alternatively, file copies for the entire check run could be reprinted, but not using MICR ink, which is more expensive than plain toner.

Companies using fold-and-seal check disbursement systems may think themselves immune because the check form, in most cases, does not include a window. Such congratulatory thinking may be premature... Forgers know that the vast majority of fold-and-seal documents are checks. Exacerbating this situation are the printing companies that sell the fold-and-seal checks. To reduce costs and maximize profits, they sell the identical blank forms to thousands of companies. In effect, the employees of all those other companies have access to everyone else's original check stock. With a scanner and a PC, any one of those employees can digitize the check layout, reproduce it with a new payee and facsimile signatures, and print it on original check stock. Under these conditions, a bank cannot be expected to differentiate a fraudulent document from an original in the Sight Review process. Further, a court would have a difficult time proving bank negligence because the bank did not select the check vendor or the check stock. And Positive Pay will not catch an altered payee.

Companies using fold-and-seal disbursement systems should have the pantograph of their blank checks re-designed and customized uniquely for them. (The cost to re-design a check should be a one-time charge of around $200.) Remember, one good check fraud loss, and the management time and attorney fees exhausted in attempting to recover the money or shift the liability, will easily erase the savings offered by fold-and-seal situations.

To deter mail thieves from stealing disbursement checks, companies should delete their name from the envelope, and use a special P.O. box in the return address field. That P.O box should be different than the P.O. box established to collect remittances. The special P.O. box is solely for returned disbursement checks. All returned checks should be handled by someone independent of the disbursement function, who would investigate the reason for the returned disbursement. Returned checks should not be returned directly to the accounts payable or disbursement clerk.