Please take a moment to read the piece below, and consider the importance of preventing check fraud for your Firm.
The Real Cost of Check Fraud
And How You Can Avoid It
It’s a fact of life in today’s
high-tech society: The very technology that makes our lives simpler also puts
us at risk for unauthorized access, duplication, hacking and fraud. And if you
are a business owner, it’s becoming increasingly clear that you’re even more at
risk than the average individual. Because small businesses have more wealth, on
average, than most consumers, they are a ripe target for fraudsters looking for
the highest possible payoff for their efforts.
A recent report from respected
analysis firm Javelin Strategy & Research shows that the average cost of
fraud to small businesses is more than double the amount of that suffered by
individual consumers. In fact, U.S. businesses lost a staggering $1.56 billion more to fraud than
consumers did in 2011.
Backing
up these statistics is the 2012 AFP (Association for Finance Professionals)
Payments Fraud and Control Survey, which revealed these startling statistics:
•
66
percent of businesses completing the survey experienced attempted or actual
payments fraud in 2011.
•
For
those who did suffer this type of financial loss, the average loss was $19,200!
•
Checks
were, by far, the primary form of payment targeted by criminals. According to
the survey, 85 percent of affected organizations reported their checks had been
targeted.
J.J.
Sorrenti, president of Dallas-based Safeguard Business Systems, Inc., believes
that as long as the economy remains unstable, check fraud will continue to be a
major concern, particularly in the business-to-business marketplace.
“Crime, in general, tends to run counter to
the economy, so a weak economy contributes to an increase in theft — and checks
are a common target,” said Sorrenti. “Safeguard is seeing more customer
interest in protection and prevention, and has taken steps over the years to
incorporate added layers of security in our paper, inks, packaging, ordering
and shipping processes. We strive to be a leader and will continue to update
and evolve our check offering with the most up-to-date features available.” In
fact, we’re so confident that our state-of-the-art security features such as
thermochromic ink and security foil hologram will help protect customers from
fraud, that we’re now also including EZShield® fraud recovery services with
every high-security check.”
Safeguard’s included EZShield
Premium Check Fraud Protection® extends protection beyond the check
to provide services in the event of check fraud. It provides advancement of
funds for a qualified check fraud event and gives access to a dedicated
resolution specialist, saving you time and money. You can focus on your
business while we provide peace-of-mind that you’re protected if fraud should
occur.
In
addition to state-of-the art features and check fraud protection services,
Safeguard’s security measures also protect the order and delivery process. For
example, the company utilizes proprietary order-screening software that looks
for known fraud indicators such as names, addresses, phone numbers (caller ID)
and account numbers.
Adds
Sorrenti, “Safeguard also offers order confirmation and shipping notification
via e-mail to ensure customers are aware of check orders placed on their
account. We can even accommodate the requirement of a password so only
authorized persons can place a check order.”
The
Cost of Preventing Fraud
So,
we’ve covered what check fraud costs businesses in the United States each year.
We’ve also discussed what’s being done to prevent it. Now the question is, “Are
high-security checks really worth the investment?”
Here’s
something to consider: Each time a business cuts a check, the cost of the
actual check itself is only a tiny portion of the overall costs of the check
disbursement process. This overall process includes labor costs to create the
check, print it, and reconcile the bank account, the cost of the envelope and
postage, the amount the bank charges to pay the check from the account, etc.
In
all, this total process can cost the business anywhere from $1.20 to $1.80 per
check. So, the difference in price between a plain check and a high-security
check is, quite literally, pennies. In other words, you might spend $1.50 to
use a run-of-the-mill check, or perhaps $1.54 to use a much more secure check.
What’s more, those few additional pennies might help you protect a check worth
hundreds of dollars or protect your business from being disrupted by a fraud
event. To many business owners, the additional protection is well worth it for
the peace of mind alone.
In the end, the decision is yours.
Armed with the knowledge of today’s fraud risks and the tools at your disposal
for overcoming that risk, only you can decide what is best for your business.
But remember, the criminal is considering what moves will pay off best for his
business as well. Don’t give him the
opportunity to profit from your hard work.
To learn more about preventing
fraud go to:
