Preparing for Payee Positive Pay

Payee verification is the key defense against check fraud resulting from alteration of a check’s payee information.  However, implementing payee verification also presents challenges for both the bank and the corporation.  Bank professionals should know their customer’s level of knowledge regarding positive pay technology and their specific concerns in order to overcome technology adoption challenges.  

Author:  Donovan Perkins

[CLICK HERE FOR FULL ARTICLE]

Implement positive pay with SecurePay today and 

stop check fraud before it starts.

Request your SecurePay Launch Kit or Demo Disk right now.

Limited-Time Special Pricing Offer on SecurePay 

Use this as an opportunity to get your most pressing client up and running on positive pay right away!

Thank you for continuing to refer SecurePay software for your corporate customer's positive pay issue files.  AP Technology would like to offer your favorite client a one-time discount on the software during the months of February and March.  Right now your client may purchase a copy of SecurePay for $395.  That is $100 discount on the standard bank price of $495 and a $600 discount on list price of $995.

To receive a pdf coupon, please send an email request to jandrews@acuprint.com with your name and phone number.  You can send the pdf coupon to one (1) of your clients during the months of February and March to receive the discount. 

Use this as an opportunity to get your most pressing client up and running on positive pay right away! Also, feel free to forward this coupon to someone else in your bank who has client who needs the SecurePay software.  

Offer Rules:

* Limit one discount per bank representative.

* Discount applies to standard product pricing and may not be used in combination with any other discount.

* No specific client needed to purchase.         

Let Us Hear From You

Reader Survey
Take a two-minute Reader Survey to give us some feedback about the Financial Data Exchange newsletter.  Filling out this survey enters you into a random drawing for a Digital Camera.  Winner will be notified via email.

SUCCESS STORY

  City of Duncanville Sees 
Big Reward of Small Investment in SecurePay

The City of Duncanville (Duncanville, TX) has been using AP Technology’s positive pay software in partnership with their bank, Bank One, since September 1999.  “Our SecurePay positive pay system has been very beneficial,” describes Philip Varghese, Assistant Finance Director for the city.  “We’re experiencing similar success at stopping check fraud as other cities in the area that have implemented positive pay.”

Philip recalls that about a year after implementing, over the course of approximately one month, three checks were presented for payment that did not match with the city’s positive pay files.  These checks totaled approximately $10,000.

Due to positive pay, Bank One was able to immediately catch the first fraudulent check as well as two subsequent fraudulent checks.  Even though the information that appeared on the first check, such as account number and city logo, was correct, the check was caught because the positive pay system helped detect that the check did not have the exact format and information as checks written from the city’s controlled disbursements account.  A key part of detection was that one of the two forged signatures was not a current signatory on the account.

Read More In the News ...
Other Cities Benefiting From Positive Pay

"Check fraud such as this is not isolated to one area.  It is occurring around the state of Texas.  One purpose of our organization is to let GFOAT members know what is happening and their fiduciary responsibilities.  We're letting them know this can happen to them, and that positive pay prevents the loss of municipal and local bank funds."
     Lewis McLain
     Executive Director
     Government Finance Officers Association of Texas (GFOAT)

Government Finance Officers Association of Texas (GFOAT) was organized in 1955 to promote, encourage and advance the professional development of governmental financial management throughout the State of Texas. GFOAT has approximately 800 members.  Their web address is http://www.gfoat.org

Fraud Alert from a City in the Fort Worth/Dallas area
(State-Level Fraud Alert to members of GFOAT)

"Since December 19th, five fraudulent checks have been presented as city checks payable to unknown payees with forged check numbers and erroneous check amounts ranging from $50,000 to $210,000. It is suspected that the criminals obtained one original city check, which they altered five times with different check numbers, payees and amounts. Three checks were stopped before deposit by the respective banks in Kentucky, Tennessee and Hawaii; however, two checks were cashed at banks in Virginia and North Carolina. One check was mailed from Canada to the credit union in Kentucky and was accompanied by a forged letter from the city asking that the credit union deposit the check to the specified account.

A "Positive Pay" system offered by the city's depository bank stopped the cashed checks. The city has not lost funds because of the Positive Pay system, which has only been in place a couple of years. Simply stated, the city sends the bank a listing of checks by date, check number and amounts before the checks are disbursed. As checks are presented for payment at the bank, the three items specific to each check are verified. The city will receive a call if one or more of the data do not match.

All cities are strongly advised to immediately implement this safeguard, or a similar system that will match check information before clearance."

GFOA Recommends Members Start Using Positive Pay to Prevent Check Fraud ...
Banks Limit Check Fraud Liability by Using a Positive Pay System

Government Finance Officers Association (GFOA) is a professional association of state/provincial and local finance officers in the United States and Canada, and has served the public finance profession since 1906. Over 15,500 GFOA members are dedicated to the sound management of government financial resources.  Their web address is http://www.gfoa.org

In the December issue of the GOVERNMENT FINANCE REVIEW, the flagship publication for GFOA, the article "Understanding and Preventing Payment Fraud" by Michael Fletcher (pg 28) states, "Section 4-102 (a) of the UCC allows banks to contractually modify to some extent their liability for payment fraud.  The contract may also attempt to define the "reasonable commercial standards" of the area.  Within the last year, customers of one of the country's largest banks received a certified letter informing them that the bank's definition of ordinary care included the use of positive pay on all checking accounts. The subsequent failure to implement positive pay has resulted in government customers absorbing fraud losses.”

  Check Fraud in the News

Police Hunt for Suspect In Check Fraud Case
Posted January 14, 2004
From The Tribune (San Luis Obispo, CA), article written by Laurie Phillips
Police in Atascadero, CA are looking for Paso Robles man they suspect in the largest case of check fraud detectives have seen.
http://www.sanluisobispo.com/mld/sanluisobispo/news/local/7707058.htm

Two Face Federal Charges in Check Fraud Case
Posted January 10, 2004
From Laurel Leader Call (MS), article written by Jason Niblett
Cauley is accused of allegedly having his girlfriend, Dena Leann Ross, cash the checks through her former position at Wal-Mart.
http://www.leadercall.com/articles/2004/01/10/news/news03.txt

Woman Suspected in Check Fraud Arrested in Wells
Posted Jan 7, 2004
From Portsmouth Herald (NH), article written by Marci Hait
A woman alleged to have bilked banks, individuals and businesses all across the Seacoast, including one in York, out of tens of thousands of dollars since September was arrested in Wells on Monday.
http://www.seacoastonline.com/news/01072004/news/68983.htm 

Eight People Charged In Check Fraud Ring which Netted $500,000
Posted June 3, 2003
From Kansas City Star (MO), article written by Jerry Walker
Indictment alleges that individuals used a computer to create and print the counterfeit checks which were purportedly issued by various business and organizations, and then submitted these checks to banks in the Kansas City area.
http://www.kccall.com/News/2003/0606/Front_Page/043.html

AcuPrint Solution Spotlight:
SecureCheck MICR Laser Check Printing Solution
Want to Help Your Clients Upgrade from Dot Matrix Check Printing?
Want to Show Your Clients the Most Secure and Cost-Effective Method to Print Checks?

SecureCheck Reduces Costs and Improves Productivity
It’s time to say “good bye” to dot matrix check printing.  Pre-printed checks and forms, bursting, and tractor feeds are history with SecureCheck nX².  Companies can start enjoying the savings.  If they are already using a laser printer for check printing, SecureCheck will create significant cost efficiencies by letting them print all checks and forms (W-2s, 1099s, transcripts, POs, invoices, etc.) onto blank stock, thus eliminating the need to purchase and secure pre-printed stock.  Information on any check, such as company address, bank name and account number, can be changed as easily as saving any text document.  And checks may be printed from one account or hundreds.  In addition, there is no need to dedicate a specific printer for check printing.  When SecureCheck is active and a file is sent to the printer, the logic realizes that the file received is or is not check data and allows it to either create a check or pass through.

SecureCheck Offers Unparalleled Security
As a hardware/software solution, SecureCheck offers customers unparalleled security while processing their standard check run.  The check form, which includes proprietary signatures, graphics, and account numbers, is stored encrypted and secure on SecureCheck’s printer hardware, and is merged with accounting data at the printer.  Security permissions can be individualized for each employee and can even include a dual employee login requirement.  Also, during each check run, an encrypted audit file is created and recorded at the printer for later security review or positive pay file creation.

For more information about the SecureCheck MICR Laser Check Printing Solution, contact AP Technology at 1-800-652-2877. 

This segment of our newsletter is dedicated to highlighting some of the latest and most intriguing fraud-stopping technologies.

Fraud Technology Focus:
Key Catchers Catch an Employee's Every Keystroke 

Would you like to know what your employees are doing at their computer?

Suspecting an employee is stealing company information or money?

Key catching or logging devices are the latest spy technology being used by employers to monitor their employees.  These devices can be a valuable way to investigate suspicious activity.  The key catcher is a small inexpensive, electronic device that captures every keystroke.  It is simply an adaptor that attaches inconspicuously in between the keyboard connection and the computer.  The device contains a microcontroller and non-volatile memory.  Once installed, anything that is typed on the keyboard is immediately recorded in the device’s memory.  Some key catchers allow for remote retrieval of the device’s memory, or the device can be removed and downloaded to another computer.  As an external piece of hardware, there is no need to install software and it is completely invisible to the operating system.  The only way to detect its presence is through physical inspection.  

SecurePay FAQ
From time to time check the Data Exchange for SecurePay FAQ.

Q: Is SecurePay difficult to install?

[CLICK HERE FOR THE ANSWER]

Contribute a Story
We want to hear from you.

Know a positive pay success story that would be great for The Data Exchange?
Want us to cover a topic you haven't seen yet?

EMAIL THE EDITOR

AP Technology

Headquartered in Carlsbad, California, AP Technology's initiative is to facilitate data conversion and transmission between banks and their corporate clients while increasing client automation.