You have to take steps to help ensure your business is protected from cheque fraud. Without preventative measures in place, you are at the mercy of criminals who look for easy targets. They often get a feel for how things are going to play out, so make sure they can’t easily get money from you and then you are left wondering how this happened!
You also have to prevent cheque fraud from happening inside of your own business by one of your employees or a clever thieve. Don’t leave blank checks where they could easily be stolen by anyone. There should be a check and balance system in place too where cheque numbers are always accounted for by at least two people. This ensures any cheque that may be unaccounted for can have a stop payment on it and even reported to law enforcement.
What is Cheque Fraud?
The concept of cheque fraud is one that is quite bold, but it can be very expensive for your business to recover from. This is a type of criminal activity where someone uses a cheque illegally. They do so in order to acquire goods, services, and even money that doesn’t belong to them. The funds come out of the cheque account holders balance and that can put your business under financial strain.
By the time you know what has taken place, it can be too late. The funds are out of your account and now money is missing that was needed for other expenses. It can be almost impossible to find those responsible if you don’t have safeguards in place. Here are some steps you can take to ensure someone doesn’t make your business a target for cheque fraud.
Make sure everyone who works for you in a capacity where they accept payment understands the risks and possibilities of cheque fraud. Often, criminals will target the business during peak business hours. They know employees are busy and trying to hurry with each customer to get to the next in line. This is the optimum time for them to try to pass a fake cheque and get away with it under the radar.
The cheque could be a counterfeit that they have made to look very realistic. Thanks to the technology offered today, it isn’t hard to print them and they often look like the real thing. Often, there will be some slight differences though that can be found if someone looks closely. The cheques can also be stolen from one business and then used at another illegally.
Some of the slicker criminals even use disappearing ink! When the cheque goes to the bank, the actual signature is no longer visible. This helps to give them the upper hand with getting away with those actions. Being well aware will reduce the risk of something like this happening in your business.
Visually Inspect the Check
Employees should always take the time to visual inspect the check. Does it look valid in all areas? Does it feel like a regular check too? What about the size of it in terms of the length and the width? If something doesn’t seem right, they should have an action plan where there call a supervisor over to evaluate it before allowing the transaction to be completed. They should trust their gut and not feel back if something they were suspicious of does turn out to be legitimate after all.
Identify the Cheque Holder
It is important to always ask for a photo ID when there is a cheque presented. It doesn’t matter if it is a personal or a business account. The person reviewing it should look closely to verify the ID isn’t fake either. The address information should match up. If it doesn’t, another form of ID should be asked for such as a valid debit or credit card.
As a further safeguard, it is a good business practice to only accept local cheques. This means anyone who is trying to use it to pay for goods or service needs to be in the general vicinity. If they are from out of the area, that can be a red flag that they are trying to do something illegal. There are times when people shop away from where they reside, but it often depends on what they purchase too.
Some business owners also limit the amount of the cheque that can be used for the purchase of goods or services. If it is over a given amount, the goods or services may need to be held until the cheque clears the bank. This can take up to 5 business days after it has been deposited. Most customers who are conducting their business legally are going to understand that wait time.
It isn’t a good idea to allow customers to make a cheque out for more than the cost of the goods or the services either. Giving them cash back in addition to taking the cheque they present further increases the risk of fraud taking place.
Trust your Gut
Criminals are often very smooth and friendly. They can be very handsome or pretty, well dressed, and seem very relaxed in the situation. You may feel bad having such suspicious about them but you should always trust your gut. It is better to decline the cheque for payment or to hold it until it clears the bank than to be taken advantage of.
Automated Verification Process for Funds
Investing in automated verification processing for cheques can be a wise investment for your business too. This requires the cheque they present for payment to be ran and scanned. It will then read the account number and the bank routing number. If it isn’t authorized, you will get immediate notification while the presenter is still in your store.
It is important to have video surveillance around your checkout areas, entrance, and exit too. Should someone present a cheque and there is an issue with it, report it immediately to law enforcement. The video surveillance information can help them to identify the suspect as well as to see what was taking place and how they presented it while in the store. Such information can be a great resource for a conviction in a court of law.