Checks and Balances

• NCJ Number: 179378
• Journal: Security Management Dated: August 1999 Pages: 76-82
• Author(s): Thomas G. Holland
• Date Published: 1999
• Length: 7 pages
• Publication Format: Article
• Publication Type: Training (Aid/Material)
• Language: English
• Country: United States of America
• Note: *This document is currently unavailable from NCJRS.

Annotation

To fight a wave of check counterfeiting, security professionals must understand fraudsters' method of operation, solutions, and the roles and responsibilities of various parties in deterring counterfeiting activity.

Abstract

Advancements and price reductions in PC hardware and software have made check counterfeiting simple and inexpensive. In a typical operation, two to three runners are driven around to various banks and enter together, or one enters shortly after the other. This is because it is less likely that fraudulent information will be identified if two sets of information are entered into the bank computer system at the same time. The checks, ranging in amounts from $400 to $800, are usually drawn on large companies' payroll, refund, or accounts payable accounts. The check stock is nondescript and can be purchased at most office supply stores. The magnetic ink character recognition line may or may not contain magnetic ink. For organized crime rings or freelancers to succeed in committing check fraud, they require information, such as the payee's personal identification information that can be replicated on a fake driver's license. Fraudsters can obtain this information in numerous ways. No one solution will eliminate check fraud; however, various prevention and detection measures will deter the fraud and mitigate losses. Every institution should have basic prevention and detection policies and procedures in place. These procedures should pertain to hiring, check cashing, staff training, the use of closed-circuit television, information protection, customer awareness, positive pay products, check stock, electronic payment, signature verification, exception reporting, and communication networks. Law enforcement must develop strategies tailored to counter particular fraudster methods, and legislators must enact tough laws that impose appropriate prison sentences and restitution requirements.