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Since the invention of the check, people have been constantly inventing new ways to pass fraudulent checks. The National Check Fraud Center estimates that 1.4 million fraudulent checks are written each day, costing businesses over ten billion in losses annually. Fraudulent check writers have found a friend in new technology such as color copiers, high resolution scanners and magnetic or MICR toner. MICR stands for Magnetic Ink Character Recognition, and it refers to the magnetically encoded line at the bottom of each check. Traditionally, this line could only be printed with a highly specialized magnetic ink on an offset press. However, with the advent of MICR toner and desktop laser printers, anybody with the right software, an HP LaserJet printer and blank check stock can print a check.

As a business owner, you and your company are susceptible to check fraud; however, there are ways to guard against it. Here are 6 steps that you and your business can follow to successfully defend against check fraud.

1. Print Your Own Checks – Real Time – The main benefit to printing yourself is security. Traditionally a business orders check stock from a company like Harland or Deluxe and they put the checks in a supply room or closet. These unused checks are a goldmine for any disreputable person that runs across them – all they have to do is grab a check from the bottom of the pile, remove it. In all likelihood, you’ll never know that last check is missing until at least a month later, and that’s if you are lucky and you regularly reconcile your check book and examine each transaction. We know because that’s exactly what happened to us.

In 1993, we had an employee that unwisely stole the last page in our check book. We never knew they were missing. Our Ex-Employee filled them out to herself and passed them as payroll checks at a used car dealer. She did get that car and several weeks later my partner’s wife noticed the unusual checks. Had she not noticed the problem who knows how much more money would have been stolen before we got wise to it. Long story short the bank had to eat the bad checks and they wasted no time making sure the case was prosecuted to the full extent of the law. We were lucky and it only cost us time. Had the employee been authorized to sign checks we would have lost the money.

By printing your own checks you only stock blank check stock and a MICR toner cartridge. There is nothing to steal with your account information, they have nothing but a piece of blank check paper. Of course you are still open to a new kind of fraud if someone is able to access your check printing software. Be sure it’s password protected and your network rights are setup so that ordinary users can’t access the directory that it resides in.

Another great benefit of printing your own checks real time is that if you move our change bank accounts, you lose nothing. Just edit your address or account numbering in your check printing software and you’ve made the switch – No wasted checks, no wasted money, no waiting for new checks.

2. Buy Secure Check Stock – When selecting a blank check stock, make sure the check stock is loaded with security features – this will make it difficult for a scammer to copy or scan the check. Recently the US treasury department spent millions adding security features the newly redesigned notes. Many of these same security features are now available for check stock. Here are some security features to look for in check paper:

Copier Void Pantograph – This causes the word VOID to appear in the background of a check when copied. A Void Pantograph is created by engraining a precision pattern of lines and dots in the background of the check. The printing of the pantograph is so precise that the VOID is not visible to the human eye, but when copied or scanned they appear making the copied check useless.
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