McGovern Consulting Group Positive Pay

1,382 views

Published on

According to stopcheckfraud.com: “71% of organizations experienced attempted or actual payments fraud in 2010.” Because of this statistic, and many similar statistics, The McGovern Consulting Group has been working hard to develop a Fraud Protection Plan for nonprofit clients, by developing an application called the Positive Pay Tool.

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,382
On SlideShare
0
From Embeds
0
Number of Embeds
651
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

McGovern Consulting Group Positive Pay

  1. 1. Positive Pay Tool for Sage 100 Fund Accounting (Formally MIP)www.mcgoverncg.com
  2. 2. Agenda● Introduction● Where is Fraud Happening?● Check Fraud Statistics● Types of Check Fraud● Options of Preventing Check Fraud● Positive Pay for Sage 100 Fund Accounting Features and Benefits www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  3. 3. Where Is Fraud Happening?● Survey participants identified signature debit card fraud, customer victimization scams, and fraudulent check deposits as the top three threats against banks deposit accounts in the next 12 months.● Industry check-related losses amounted to an estimated $893 million in 2010, down slightly from the estimated $1.024 billion in 2008. The number of fraud cases also decreased. Source: American Bankers Association http://www.aba.com/Surveys+and+Statistics/2011DepositAccount.htm www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  4. 4. Where Is Fraud Happening? ● Industry losses from debit card fraud—POS signature, POS PIN, and ATM transactions combined—reached an estimated $955 million in 2010, an increase from $788 million in 2008.● More than 7 in 10 banks (73 percent) reported having check fraud losses in 2010. Over 9 in 10 banks (96 percent) reported having debit card fraud losses in 2010.Source: American Bankers Association http://www.aba.com/Surveys+and+Statistics/2011DepositAccount.htm www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  5. 5. Industry Statistics Review Among the most widely usedtechniques to commit paymentsfraud were counterfeit checksusing the organization’s MICR linedata (68 percent), alteration ofpayee names on checks issuedby the organization (56 percent),and alteration of dollar amount onchecks issued (35 percent).Source: http://www.stopcheckfraud.com/statistics.html71% of organizations experienced attempted or actual payments fraud in2010.Checks were the payment format most frequently targeted for fraud, with93% of attacked organizations reporting that their checks were involved. www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  6. 6. Industry Statistics Review ● Checks were the payment method subject to the greatest financialloss resulting from fraud in 2010 for surveyed organizations. Fourteenpercent of organizations that were victims of at least one attempt ofcheck fraud during 2010 suffered a financial loss resulting from thefraud. ● Checks are still the most widely used payment instrument for B2Bpayments.Source: http://www.stopcheckfraud.com/statistics.html www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  7. 7. Types of Check Fraud ● Businesses remain the primary targets of check fraud professionals - especially by organized rings of criminals. In terms of counterfeiting and alteration, payroll checks and accounts payable checks are big targets. Counterfeiting/duplication, alteration, forgery, paperhanging, and check kiting are some of the more popular forms of check fraudwww.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  8. 8. Liability and Compliance● Unfortunately, check fraud is a relatively low-risk crime that goes unreported or unprosecuted much of the time. Because of demands on law enforcement, prosecutors fail to pursue 75% of bank check fraud cases. And according to the U.S. General Accounting Office, in major cities where there is greater emphasis on using resources to prosecute violent crime, the number often exceeds 90%. www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  9. 9. Positive Pay Is a Way To Successfully Combat Check FraudBanks and large businesses are protecting themselves and arepromoting a technique called positive pay as a method of fightingcheck fraud artists.Generally speaking, positive pay works like this:1. Using accounting and database software, a company regularly sendsits bank a positive pay file that lists all the checks written against thatcompanys account(s). That file includes a record of each checks issuedate, amount, check number/account and payee name. www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  10. 10. Continued.. 2. When a check reaches the bank for payment, the bank compares the check against the positive pay file. Any discrepancies in a checks information trigger a flag that the check in question may have been altered. 3. The bank notifies its corporate customer that the discrepancy has been noted and asks the company to verify the authenticity of that check.www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  11. 11. The Positive Pay/Check Clearing Process● The issuing company (maker) sends checks to its suppliers and transmits an electronic positive pay file to its bank (paying bank). The positive pay file sent to the paying bank must include records of all checks written and must be regularly transmitted to effectively detect potential fraud.● Since checks are paper-based documents, they are inherently subject to theft, forgery and alteration, from both internal and external sources. The recipients of the checks deposit those checks with their respective banks (depository bank), which then submit them for payment to the paying bank. If the paying bank finds that a check does not match the electronic file previously received from the issuing company, the paying bank notifies the company of the discrepancy. www.mcgoverncg.com | 888-876-1544 | info@mcgoverncg.com
  12. 12. The Positive Pay/Check Clearing ProcessTo find out more about The Positive Pay Tool contact us today! www.mcgoverncg.com888-876-1544 | info@mcgoverncg.com

×