According to the 2024 AFP Payments Fraud and Control Survey Report, checks remain the most vulnerable payment method to fraud, with 65% of organizations reporting check fraud activity; this data indicates a rise in check fraud compared to previous years, with 80% of organizations experiencing payment fraud attacks in 2023.
“Check fraud protection positive pay” refers to a banking service that helps businesses prevent check fraud by automatically comparing the details of checks they issue with the details of checks presented for payment, flagging any discrepancies as potential fraud and allowing the business to decide whether to authorize the payment or not; essentially acting as a layer of protection against altered or counterfeit checks by verifying check numbers, amounts, and payee names against a pre-submitted list of authorized checks.
Key points about positive pay:
- How it works: A business submits a file containing details of all the checks they have issued to their bank, including check numbers, amounts, and payee names. The bank then compares this information to the details of any checks presented for payment, alerting the business if there is a mismatch.
- Benefits:
- Reduces the risk of fraudulent checks being cashed.
- Helps detect altered or counterfeit checks.
- Provides businesses with a proactive way to monitor their checking activity.
- Fee:
- Your bank will charge a fee for this service, but it is well worth it because it would protect you from a fraudulent check being processed against your checking account – this loss may not be covered by your bank.
We recommend that you contact your bank to see if this service is available to you. Please call us if you have any questions.