....how can your bank protect itself from massive liabilities on this count
Banks are liable to pay for fake cheques
When banks are made liable to pay for cheque fraud, it would have a significant impact on the banking industry. It should change the way banks would look at cheque security.
In a directive, a consumer court in India had directed a Bank in Mumbai, India to share the burden and be liable for counterfeit cheques.
Tampered and outright fake/fraudulent cheques have posed a problem for both citizens and the banks for a very long time. While newer technologies have helped banks come up with better security features & printing techniques for the cheques, it has not had a significant impact on reducing cheque frauds. The scamsters have gained access to better technologies, and equipment, making the task of detection quite difficult. Today’s banks have automated systems to have a quick and easy verification of the cheques. With automation, the speed of clearing has become significantly faster, but not necessarily the ability to for a fake cheque to be easily detected by the clearing system.
Since the new, sophisticated technology is available to all, both banks and scamsters have access to exact similar technologies that would help scamsters to print/create a fraudulent cheque with the right serial numbers and the MICR codes to get them cleared by image-based clearing and scanning systems.
This is how it works….
Usually, the fraudsters will take the running serial numbers from an authentic checkbook and use forged signatures or even lift copies of the signatures from real cheques. Since these serial numbers are already existing genuine serial numbers and signatures can be reproduced to match the original, these fake cheques go undetected by the clearing system.
How do you stop this?
With QR code cheque security you would add a Secure QR Code with details such as cheque number, account number and bank code stored inside. Innovative technology ensures that high security, tamperproof QR code can only be created by the issuing bank.
This cheque-specific QR code is machine-readable and the information inside can be cross-checked with the MICR information to validate the cheque and identify the fraudulent ones, even at the receiving banks even before sending this to clearance. Most importantly the QR code is unique for ‘each’ cheque and can only be generated by the issuing bank.
This technology can be easily integrated with the existing infrastructure and can handle the necessary processing volumes. Qryptal QR code for financial services is privacy-friendly with no dependency on databases and zero sharing of customer sensitive information.
Read on …to learn more on a schematic representation of cheque security, click here - How can cheque security be implemented easily in banks.