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Uncontrolled Check Stock and Check Fraud | SAFEChecks | Articles

Uncontrolled Check Stock and Check Fraud

Uncontrolled check stock is generic, non-customized stock that is sold entirely blank to multiple parties, and is a major source of check fraud. This is because uncontrolled check stock is readily available to anyone, including forgers, counterfeiters, embezzlers, and other criminals.

Even if a company buys its checks pre-printed with its name and bank information, if the check manufacturer also sells that same stock totally blank to other entities, that stock is uncontrolled, and has the same risks.

When check stock is uncontrolled, it does not matter how many security features it has. For example, a criminal won’t need to copy, chemical wash, or lift printing off a check if he can easily get an original, new check. So, having a copy void pantograph, chemical reactivity, or toner anchorage becomes a moot point. If multiple companies have access to the same original blank check stock, a company is left with no legal defense against their bank if the bank pays a counterfeit check which is made on check stock identical to their own. (See Triffin v. Somerset Valley Bank and Hauser Contracting Company, Superior Court of New Jersey, Appellate Division.)

SAFEChecks never releases check stock that is completely blank. Each order is customized specifically for the end-user organization. There must be something visible, such as a logo in the corner, website along the side, or a different type of background design, to make it unique. There are many ways to customize a check while still accommodating the fact that some companies need to be discreet regarding their identity on their checks.

Another security flaw presented by uncontrolled check stock is that it almost never comes with inventory control numbers. There is no system to determine whether any checks have been stolen, prior to the company printing on them. This is an open invitation to fraud on some level. Internal fraud losses will not be covered by the organization’s financial institution. If the front of the check is not numbered with a MICR line, SAFEChecks prints sequenced inventory control numbers on the back of the check to deter theft and embezzlement.

SAFEChecks, “The Check Fraud Prevention Specialists” understands the serious nature and magnitude of the check fraud problem in our country. Check fraud is the most dominant form of payment fraud, and produces more losses than all other forms of payment fraud combined. While there is no product, policy, or program that, by itself, will provide 100% protection, SAFEChecks' products and services will help your organization build the best defense against criminals involved in check fraud.

Since our founding in 1996, SAFEChecks has never had a check replicated or used in a check fraud scam.
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