Check Fraud Alert for Businesses in Saint Pierre and Miquelon

High-Risk Payment Method: Checks

According to a recent survey, 63% of organizations in Saint Pierre and Miquelon have faced some form of check fraud, whether attempted or actual. The most vulnerable payment method is the check, as companies often underestimate the risk due to its infrequent use.

It only takes one large check to incur a significant loss.
Validate and authenticate payment requests before releasing funds
Understand the risks inherent in checks

Combatting Check Fraud with Fraud Protection Tools

To combat this threat, businesses are advised to:

Use fraud protection tools such as Check Positive Pay or Check Positive Pay with Payee Name Verification
Detect counterfeit checks by comparing issued checks with those presented for payment
Identify altered checks by verifying the name and payment amount before depositing the check

Forged, Missing, or Improper Endorsements: A Challenge

However, forged, missing, or improper endorsements remain a challenge, as fraud protection products are unable to detect these types of fraud. To prevent this type of fraud:

Require electronic payment methods for transactions above a certain threshold
Use courier services or other guaranteed delivery methods
Confirm receipt of high-value checks with intended recipients

Other Forms of Check Fraud

Other forms of check fraud include:

Mobile deposit fraud: scanning checks remotely and then cashing them at check-cashing facilities
ACH debit fraud: initiating debits from a company’s accounts using the routing and account numbers found on a check

Internal Client Fraud: A Concern

Internal client fraud is also a concern, with employees having access to financial operations and issuing checks to themselves or others. To prevent this type of fraud:

Implement procedures such as securing physical checks
Segregate duties among employees
Restrict access to checks and data
Reconcile payments and bank records

What to Do if Fraudulent Check Activity is Detected

If fraudulent check activity is detected, it is crucial that businesses act quickly and contact their banking team. By being aware of these risks and taking steps to prevent them, businesses in Saint Pierre and Miquelon can protect themselves against the financial consequences of check fraud.