Cheque Fraud Risk Calculations

Ernst & Young and The American Bankers Association have now calculated the potential risks of Cheque Fraud to organisations.

They both agree that cheque fraud is big, so where do you stand?

Are you a Risk Manager?.. Or a Risk Taker? Lets look at the numbers they have calculated for the risks.

Risk Size

According to Ernst & Young in the USA of the 42 billion cheques issued each year, 500 million are fraudulent (1.19%). Types of fraud include duplication, alteration, forged signatures, forged endorsements, and other loss reasons.

Risk Trend

According to the American Bankers Association cheque fraud will grow by 25% annually.

Financial Risk

The average fraud loss is $1545 per cheque and growing* (American Bankers Association).

*Does not include legal costs or expenses of resources to remedy.

Reputation Risk

A big cheque loss could put a serious dent in your corporate credibility.

Cheque Fraud is Easy

With today's IT technology, cheque fraud can be easy if proper protection and systems are not in place. There are no `rocket science' qualifications required to achieve it.

Cheque duplication could be achieved just by scanning the original cheque, then digitally changing the payee name and amount, then printing the `new' cheque on a colour laser printer... which looks very close to the original.

Cheque alteration could be achieved by carefully scratching off the amount details on the original cheque, or pulling them off or using chemicals to remove the ink or toner, then just pasting on the `new' amount details.

Calculate Your Risks from Cheque Fraud Now

Using the Ernst & Young data, 1.19% cheques are fraudulent, and using The American Bankers calculation the average fraud loss is $1545 per cheque, so the following risk calculations can be made.

Monthly Cheques Issued Annual Fraud Odds
(Cheques per Year)
Your Annual Fraud Risk
100 14.28 $22,062
250 35.7 $55,156
500 71.4 $110,313
999 142.65 $220,405
2000 285.58 $441,251

So even for the smallest cheque user they believe the potential loss is high, but preventing cheque fraud can be easy if you adopt a Two-Step Security Approach.

Two-Step Security Approach to Prevent Cheque Fraud

Step 1

Specify an advanced security paper, with security features built into the paper to directly address duplication and alteration fraud (PCF!secure CheqMate cheques can be watermarked, contain chemical protection agents, special toner fusion coatings and carry holograms).

Step 2

Add laser printed security features for extra protection from alteration fraud (PCF!secure toner mark repeats all payee and amount details up to 10 times onto the background of the cheque) and strict password protected internal systems protect users from the unauthorised laser printing of cheques or cheques with incorrect amount and payee details.

Security Software and Print Products

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