Forgery Protection for Checks and Important Documents
The Growing Problem of Document Fraud and Forgery
As check fraud skyrockets, the legal responsibility has been shifted from banks to account holders, unless the issuer has shown due diligence in protecting its checks. According to a 1998 Supreme Court ruling, “The issuer of the document is held legally responsible; the omission to use the most effectual protection against alteration is evidence of neglect, which renders him responsible for the fraudulent amount.”
Using safety features to protect your documents may significantly reduce your liability for a loss in the event of fraud. Fortunately, these same features will effectively deter criminals from attempting to alter the document in the first place. If a check is difficult to alter, criminals will look elsewhere for easier prey.
Jewelry Store Chain Hit Hard by Check Fraud
To many crooks, jewelry stores seem like ideal targets. In just a few minutes, they can make off with thousands of dollars in gold, silver, diamonds and gems. But thieves recently saw one jewelry store chain’s checks as their key to riches.
While the jewelry store chain protects its 1,300 stores with security cameras, alarm systems, vaults and more, its payroll and accounts payable checks had only one outdated security feature, a “void” pantograph. Consequently, they soon paid the price when a disgruntled employee altered a paycheck and stole $11,000 from the company. Around the same time, an employee at one of the chain’s ven-dors altered one of the company’s accounts payable checks and stole $28,000.
After discovering the fraud, the jewelry store chain immediately contacted its bank to recoup its losses. But the bank refused to accept responsibility. Since the revision of the Uniform Commercial Code in 1998, companies that don’t show “ordinary care” by taking steps to prevent fraud can be held liable for fraudulent checks. Ordinary care includes the use of security features such as chemical-reactive paper, microprinting, watermarks and border copy warnings, as well as proper storage of checks and other negotiable documents. Because the bank required at least four security features on its customers’ checks, it said the jewelry store chain didn’t show “ordinary care” and was liable for its losses.
How To Protect Your Documents
Other Optional Document Security Features Include:
DocuCheck is available in both 26# carbonless and 24# bond. The carbonless has an endorsable CB coating that prevents pens from skipping when endorsing checks.
Commander Printed Products
3450 Camino Del Sol • Oxnard, CA 93030
Phone: (800) 722-3676 • Fax: (805) 988-6880