Protect Yourself and Your Cheques from Fraud

    Jan 09 2014

    Cheque use is still declining with the ease and prevalence of electronic payment methods.  Just like cash continues to hang on, however, cheques are still preferred for some types of transactions over all other methods of payment.  People still tend to give personal cash gifts by cheque, and professional service people are often paid by cheque, especially self-employed professionals.  So even if people only write a few in a year, the need to use them safely and prevent issues stemming from cheque fraud still matters.  Here are some recommendations on how to protect yourself from cheque problems.

    Monitor Your Cheques and Accounts

    To prevent your cheques or bank accounts from being used in a fraudulent way, keep a close eye on both.  Make sure your cheques, whether personal or business cheques, are kept in a secure location with limited access.  Check your bank statements regularly, at least once every month, for suspicious activity or fraudulent transactions.  Where possible, consider switching to more secure types of payments, especially in cases where you can benefit from greater efficiency and save time, too.  Switching to automatic payments, for example, means you don't need to remember to write and send a cheque every month, and as long as you have sufficient funds in your bank accounts, such payments are always made right on time.

    Protect Yourself When Accepting Cheques

    When you need to accept cheques as payment, take some basic precautions to ensure the cheques you receive are legitimate.  Most cheques have some sort of built-in security features such as watermarks and special anti-photocopy printed designs.  The back of a cheque often describes whatever security features are included, so take the time to look for such features and verify them.

    If you’re not sure about a transaction, and if at all possible, make sure a cheque has cleared the banking system before you release products or provide services to a customer.  There is a careful balance to reach here between good customer service and protecting yourself against fraud, but having clear policies regarding how you accept cheques, and making sure your customers or clients understand them is a big help.  Any time you accept a cheque from a customer, make sure it is correctly and completely filled out.  Don't accept cheques which are post-dated or made out for an amount larger than the actual payment for the product or service.

    If you handle a large volume, an automatic cheque scanner and endorser can help you to process them and check their validity at the same time.  Many cheque scanners have built-in features to look for security features, including those that are not easily checked visually such as scanning for magnetic ink in MICR lines, and comparing cheque images quickly to detect any potential problems.

    Cheques can provide great convenience in some cases, but they can also be a source of problems.  Just like any method of payment, if you understand how to use them correctly and how to protect yourself from potential fraud, you can accept cheques safely and reliably as payment for your services or products.

    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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    CashTech Currency Products Inc.
    1040 Cardiff Boulevard
    Mississauga ON, L5S 1P3