Did you know that the payments landscape is shifting due to the decline in check volumes, increase in use of the Automated Clearing House (ACH), and explosive growth of card payments? Unfortunately, the majority of organizations also report an increase in incidents of payments fraud. Furthermore, with the Uniform Commercial Code (UCC) shifting some liability for check fraud from financial institutions to depositors, Amegy Bank recommends a review of your organization’s fraud controls. As recently stated by the UCC:
“Banks and their clients are required to use "ordinary care" to prevent check fraud, implementing "reasonable commercial standards" that prevail in the area in which the person is located and the industry in which the person is engaged.” Prevailing standards include clients using bank products like positive pay to prevent fraud.
Payments fraud is on the rise with reported incidents jumping from 55% reported in 2004 to 72% in 2006 and amounting to an average of $23,300 in organizational financial loss. (2007 AFP Fraud Survey).
• Checks continue to be targeted most by thieves with nearly all organizations that reported payments fraud indicating they were victims of actual or attempted check fraud.
• ACH fraud is on the rise with 36% of organizations reporting actual or attempted ACH fraud.
The good news is that many organizations are able to avoid financial losses through the use of bank-provided services and sound fraud prevention practices.
Avoid financial loss by contacting your banker today or calling 713-232-2200 to schedule a FREE consultation and review of your check fraud safeguards.
