Fraud costs U.S. businesses more than $400 billion annually, but banks are helping their business clients fight back with technology.
For example, business clients using Fifth Third Direct, the online banking arm of Fifth Third Bank, can sign up for Positive Pay.
“Positive Pay allows us to provide a list of items that are suspect in each account every day,” says Ann Byington, vice president, treasury management, for Fifth Third. “The user signs into the system and sees the accounts that have items that are suspect. They then choose whether to stop payment on the item or approve it for payment.”
A common fraud practice is changing the name or the dollar amount on a check. With the Positive Pay system, the bank compares a business’s list of checks to what was submitted. Discrepancies are flagged for approval.
“If they are looking at an item and aren’t quite sure, they can see an image of the check,” says Byington. “It gives them clear vision on whether it is a fraudulent item or not.”
To help prevent internal fraud, the bank keeps a log on all pay/no-pay decisions.
“You can monitor who’s taking actions, and any issues that come up can be tracked back to make sure the appropriate decision was made,” says Byington.
The system can also be set up so multiple people have to approve payment of questionable items.
KeyBank instituted a similar system utilizing AcuPrint Technology, called SecurePay. Like Fifth Third’s Positive Pay, when checks appear suspect, the business is contacted for approval. The goal of all these systems is to help businesses prevent fraud with a minimum of burden.
These systems are a must for companies that issue more than 500 checks a month, but Byington says Fifth Third is seeing more businesses that fall into the 100-check range signing up for the service.
“If you look at the cost vs. exposure, one check for $10,000 that you lose because it’s fraudulent is far more than the small monthly fee,” says Byington. How to reach: Fifth Third, www.53.com; Key Bank, www.Key.com