Fight Fraud with Positive Pay

With bank fraud on the rise, it’s important that you know exactly what to look out for in both your personal and professional finances. It’s not only phishing scams you need to watch out for—despite the increase in digital payments, check fraud still costs individuals and business owners thousands of dollars each year.

This type of crime has increased by over 20% in the last few years, so knowing how to protect yourself is crucial. West Shore Bank clients are turning to systems like Positive Pay to boost their financial protection and feel confident that their money is safe.

At West Shore Bank, Positive Pay is offered to our business customers as part of our Treasury Services Suite. It’s an automated cash management service that’s used to match checks issued by companies with those that are presented for payment, in an effort to detect suspected check fraud such as forged, altered and counterfeit checks.

Any checks that are considered to be suspicious are returned. Criminals will attempt to create and cash counterfeit checks and withdraw money from business bank accounts this way. With Positive Pay, any check details that don’t match between the issuer and the cashier are flagged.

Positive Pay works for both physical checks and ACH payments. Checks are automatically compared to those in your check issued file, while ACH Positive Pay compares the transactions presented for payment to authorized companies on file.

Once a business customer has enrolled in Positive Pay, a list of checks issued will be provided electronically to the bank that includes who the payee is for each check, the dates, amounts, and check numbers. The information about the account that the checks are being cashed from will also be included.

The bank will then cross-reference these checks when presented for cashing, against the list provided by the customer. Any checks that are validated are cashed, while those that don’t match to the customer records are presented to the customer as exception items. The bank then notifies the clients with information about the non-matching checks, and those are decisioned (either returned or processed) electronically through an online banking portal.

When checks are compared against the customer Positive Pay list, forgeries, alterations, and counterfeits can quickly be detected and the payment denied. This can protect business owners from losing thousands of dollars to fraudsters and criminals.

Check fraud is nothing new. But during the pandemic, when the US government were mailing relief funds to individuals and businesses, criminals took advantage and the rates of this type of fraud significantly increased.

In 2022 alone, there were nearly 700,000 reported cases of check fraud, with the US Postal Service recommending to avoid mailing checks wherever possible. Experts predicted losses of nearly $25 billion in that year alone, twice as much as five years ago.

Once criminals have checks in hand, they typically go through a process known as check washing. This is where uncashed checks have the ink removed using a special solvent, making it easy for criminals to change the date and dollar amount listed.

Like cybercriminals, those who operate check fraud scams may also attempt to steal personal information like an identity through a driver’s license or passport. A fake business may be created to cash a business check, which is then deposited into a fake business account.

This is why it’s important to remain aware of other types of fraud that you or your business could be exposed to. Remember that a bank will never ask you for details like your Social Security Number or online login details, so always report instances of this occurring to your financial institution.

Always use strong passwords for your online accounts and keep your business money separated from your personal funds. Creating a business savings account to hold some of your long-term cash can also protect you, as this will have a separate account number to your everyday business checking account. If criminals access the checking account using check fraud, your savings should still be protected.

With our team of experts and Positive Pay in place for our business customers, your hard-earned money is protected from check fraud as quickly as possible.

A recent customer experienced this first-hand, when two forged checks were presented to the bank. Two checks totaling over $5,000 were immediately cross-referenced with the Positive Pay list and then the authenticity of the checks was confirmed with the customer directly. When these checks didn’t align with the businesses payments they were denied, allowing us to immediately stop payment against these forged checks.

The customer noted that “the service was offered to us early in our business relationship with West Shore Bank and we saw the benefits of implementing this system. Positive Pay is an easy and effective way of mitigating the risk of unauthorized activity on your bank account. With criminals becoming more sophisticated in their approach, this simple and cost-effective service protects you from fraudulent payment requests.”

Keep your business finances safe when you switch to West Shore Bank for business checking and savings. Add Positive Pay to your bank account today and protect yourself from business check fraud straight away. Contact us or stop by one of our branches to talk to a Treasury Management Officer and get your new protections put in place today. West Shore Bank has several branches conveniently located across West and Northern Michigan. Visit us in Ludington, Traverse City, Scottville, Frankfort, Manistee, Hart, or Muskegon.