Treasury Management Tips


Imagine that your neighbor experiences a home invasion, so you buy a security system. You are on alert the first few months, activating the alarm, setting lights on timers, and refraining from posting on social media when you’re gone. As time goes on, however, you slowly begin to let your guard down and then burglars strike.

This Happens At Businesses Every Single Day.

The latest banking solutions to detect fraud are only as good as the weakest human link in your organization. In particular, check fraud is the most common method of business-to-business payment and, although it is slowly decreasing over time, it remains a very common crime. Often by the time it’s discovered, the funds are no longer recoverable. Here is a real check fraud crime involving more than $60,000 in counterfeit checks.

Check Fraud Case Study

The business called their bank about a phone call they received from an unrelated person who received a check from the business that it realized it hadn’t issued. The very next day, more checks from this business account present to the bank for payment. Over the next three weeks, more than 15 counterfeit checks totaling more than $60,000 were written against this commercial checking account. Because of the first phone call from the other party to the business, it appears those who cashed or deposited the fraudulent checks were also victims of fraud in a check-cashing scam.  These check recipients, referred to as money mules, lost money as their bank received the returned, fraudulent checks. The business also lost non-public, personal information and a lot of time investigating what happened. The counterfeit checks were printed on two different check stocks and contained two different signatures, neither of which looked like the actual authorized account signers. The check numbers used were in line with valid check numbers the business was currently issuing.  It is likely the fraudsters intercepted a paper check in the mail and created counterfeit checks.

Protect Your Business

The best way to make sure your business doesn’t lose money in a check fraud scheme is to rely on a strong combination of preventative solutions and daily human vigilance. Here are three best practices to help your business recognize check fraud:

  • Review account activity DAILY. This is of utmost importance. Review the account activity for ALL accounts online every day and reconcile your statements. This is the equivalent of the home security system – using it is imperative to helping protect your account. Daily review of your accounts will help you spot when something is wrong.
  • Use Payee Positive Pay correctly. A best practice, this solution works as an early fraud detection system, and requires vigilance on the part of the business. With Payee Positive Pay, you electronically upload your check file showing all checks issued on your account with your bank. As they appear at the bank, you will receive alerts of any checks that don’t match the uploaded issued check file. You approve or reject the presented checks via online banking or the mobile app. This is where businesses sometimes rush through, approving checks flagged as suspicious by Payee Positive Pay. Once the checks are paid, it is unlikely funds can be recovered.
  • Triple check your work. Consider the consequences of everything you do. Rushing through tasks often results in loss of money, time, and private information. Stay alert; if something seems suspicious, be skeptical, research and act quickly to determine if the transaction makes sense.