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Are You Doing Enough to Ensure Check Fraud Protection?

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Contrary to popular belief, businesses are still susceptible to check fraud, as it remains one of the most prevalent methods of attack on businesses. The key to reducing the impact of check fraud on your business is to know what it is and the best ways of avoiding it:

  • Check fraud in modern business is an ongoing problem that still costs businesses up to 1.5% of total revenue.
  • Preventing check fraud in the coming year will require your business to enforce ID checks, accept check payments from only trustworthy clients, and prioritize digital and ACH payments for more secure transactions. 
  • Let Kaizen lead the way for a safer and more secure accounting process for your business. This begins with being open to hearing about the dangers of check fraud and learning about more secure solutions.  

Keep reading to get a more in-depth look into why electronic payments will matter in 2022 when protecting your business from check fraud and other attacks. 


Despite what might be popular belief, check reliance is still huge in business payments — because of this, check fraud is still more impactful than you might realize. In fact, the threat of check fraud often goes unrealized despite its impact on the bottom line.

According to Troy Security Solutions, there is a 'resounding lack of awareness' regarding check fraud in the business environment. Despite costing companies $4 to every $1 of fraud lost, less than 10% of business execs consider check fraud management important or valuable. 

Check fraud can affect both print and digital payments, consisting of a criminal illegally obtaining your money via checks. In the simplest form, it is the act of using checks to commit fraud. No one wants to think it will happen to them, but more often than not, it does!


There are at least two types of check fraud to look out for when running a business: being paid with counterfeit checks and having your checks stolen to extract money from your bank account. They are categorized as counterfeit checks and stolen checks. 

Counterfeit Checks

Counterfeit checks are fraudulent checks often created with fake information. When you receive a counterfeit check from a customer for a good or service, it can take weeks to discover that the payment was with a fake check.

This means that although it says it 'cleared' in your account, that money will come back out later when that scammer is likely long gone. The FTC warns that you shouldn't "rely on money from a check unless you know and trust the person you're dealing with," especially since you'll have to pay the bank back in the full amount of the fake check when discovered. 

On the other hand, criminals can also use counterfeit checks to steal money from your account and request cashback (i.e., overpay and request the excess payment upfront). 

Stolen Checks & Check Cloning

Fake checks shouldn't be your only concern, however. Real company checks can be stolen and/or cloned, as well. This can happen within the company by an employee or outside the company by a scammer or customer.

You should always be wary of using checks in your business since a break-in can lead to stolen checks (and irreversible damage to your profit) just as much as an employee swiping one or more to deposit into their personal accounts without approval. 

And just like counterfeit checks, criminals will use stolen checks to make a purchase, which results in paying your bank the allotted amount again when it is discovered. 


Preventing check fraud in 2022 will require you to prioritize secure payments. Here are some steps to consider. 

Make IDs Mandatory

Having mandatory IDs comes with a host of benefits like building employee confidence and accountability and improving customer relations. However, it is extremely important for security. Having IDs for every employee will allow you to immediately pinpoint employee names and positions throughout the building. This will also allow you to restrict entrance to certain locations and limit exposure to your checks.

Only Accept From Trusted Customers

Having a substantial history with a client that uses checks as a form of payment can make it safer to do business with them. You already know that their checks have fully cleared in the past and can rest assured that those results are unlikely to change. On the other hand, you never really know with a new client. Using a check for payment for the first time will always be a BIG risk until you know you can trust them.

Utilize ACH Methods and Digital Payment

Transitioning to a world of more secure payments often means utilizing ACH (Automated Clearing House) methods and digital payment. Check reliance comes with more risks than rewards, so most businesses have chosen to move in this direction. 

Digital payment refers to the process of transferring money from one account to another using technology. Some examples include mobile payment apps and wallets such as:

  • Venmo
  • PayPal
  • Cash App
  • Zelle, etc. 

Not only are they more secure payment options, but they're also more convenient since they can safely store customer payment details. 

ACH, in particular, refers to a network run by the National Automated Clearing House Association (NACHA). The electronic payment transfer system deals with your automated money transfers and electronic payments. According to NACHA, they have received nearly one billion new payments for at least six consecutive years, valuing total payments at more than $61.9 trillion.

Sign Up for Positive Pay With Your Bank

Another way to prevent fraud is by signing up for positive pay with your bank. This fraud prevention tool allows you to monitor and detect suspicious transactions, ultimately putting you in control if transactions don’t match. With this solution in place with your bank, you can reduce the risk of financial loss and safeguard your business’ most valuable assets.


Any fraudulent activity can break a small business if severe enough. Limiting your exposure and vulnerability to attacks is essential to protecting your biggest asset as you continue to grow.

Kaizen understands that you may not always know the best methods for protecting yourself from check fraud and other attacks. This is why our team of professionals works hard to keep your business safe while improving performance and helping you make more informed decisions. 

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