Check Fraud is No Longer Just a Banking Problem
All businesses need to be aware of changing legislation relating to check fraud. Over the last 10 years, the number of reported cases of check fraud has grown more than 1,400 percent. "To date, losses resulting from check fraud exceed those from credit card fraud, automated teller machine theft, and armed robbery combined!" reports Nations Bank Senior Vice President Robert D. Croskery.
Check fraud has been the fastest growing form of bank fraud in the past five years, with $10-12 billion a year falling into the hands of sophisticated criminals using the latest desktop publishing equipment and supplies. While this fraud problem is everywhere, a key area of concern for industry experts is highly fenceable goods. "We are finding numerous examples of check fraud in auto dealerships, in particular mega-dealers that specialize in down-stream parts sales to autobody and repair shops," says CrossCheck, Inc., Senior Vice President Ray Cook. "Businesses that sell products that can easily be turned into cash are prime targets, and I can't think of anything easier to turn into cash than auto parts," Cook notes.
In the past, financial institutions assumed much of the liability associated with check fraud. However, revised articles of the Uniform Commercial Code, now the law in many states, require organizations to exercise ordinary care in guarding against check fraud.
