Cheques are in use for business and individual payments, since the roots of ancient banking in ninth century. The person who wrote the cheque instructs the bank to withdraw a certain amount of money from their account and pay it to the person in whose name the cheque is being issued.
Cheques became a highly popular non-cash method inorder to make payments during the 20th century and their usage peaked. Around the turn of the millennium, billions of cheques were being issued annually by businesses.
The prominence of cheque usage increased its fraudulence too over time. That’s when financial organizations and economists began brainstorming over ways to prevent cheque fraud and lessen these frauds.
A few examples of cheque fraud are using the float (the interval between the negotiation of the check and its clearing at the financial institution of the cheque writer) to withdraw this money. A cheque kiter happens when a person deposits money before the conclusion of the float period in order to hide the fraud.
5 ways to prevent Cheque Fraud
Now to prevent cheque frauds that cause such hassle with transactions and businesses to keep them from collapsing? Some of the common ways to prevent cheque fraud are-
Writing the cheque
If a cheque is corrected and cancelled, it is considered fraudulent if a mistake was made. No action is required on its replacement. One should always cancel and issue a new cheque to present a correct and professional image to business suppliers and banks. Write the whole payee name and amount in words and numbers, being sure to scratch out any unnecessary space or gaps and avoid overwriting; sign with your own pen and never pre-sign a blank cheque.
Cheque cross/account payee cheque
Account Payee Cheques should be crossed in order to prevent cheque frauds. The bearer should cancel (struck off with two diagonal lines) or write the words ACCOUNTS ONLY PAYERS at the top of the check to make it an account payee-only cheque, used for account-to-account transfers only. The cheque means money is credited only to the payee’s account. Above all for these cheques cash at the counter is not allowed. Accordingly the bank is alerted for an account-to-account transfer.
Bank activity check
Sign up and register for SMS notifications with your bank, using a functioning cellphone number to keep track of all account activity. Keeping track of the bank depending on the cheque volume helps to be up to date with monetary transactions. Similarly, it is important to obtain a receipt when issuing a cheque. Have the receiver of the cheque sign a copy of the check and get an official receipt. This is to ensure that the receiver has approved the date, amount, and other aspects of the transaction.
Correct Date and validity
Cheques often have dates written in 10.02.2020 format. One should always write the date on checks in the format DD-MM-YYYY (February 10, 2020). Similarly, an undated check can lead to many problems because it allows the check holder the right to bankroll at any time. You should mention cheque validity on it if you’re issuing someone an undated check. This way, to the said period your commitment is less.
Using a cheque printing software
Another way to prevent cheque fraud is by using cheque printing software. Where the sender can completely avoid written mistakes, overwriting, and cancellations. Printed cheques are account payee cheques. The receiver’s bank account is then transferred the amount.
A Cheque printing software application is a computer program for printing as well as managing checks. The cheque processing program allows printed statements and properly creates printed checks and reports with all the necessary information such as payee name, number, amount, date, payee account etc. which helps in easily preventing check fraud.
Cheque Printing Machine significantly help businesses to run their financial transactions efficiently. They offer the following benefits –
- Proactive and efficient business process
- Multi-cheque printing and templates
- Comprehensive reporting
- Payee management
- Easy and handy to use
Penieltech is a provider of one amongst the best check printing solutions by Elatesoft in UAE. Their program helps in printing almost any valid bank check in a couple of minutes without any typos or mistakes also completely avoids cheque fraud. They offer an undoubtedly adaptable software solution that is customizable according to your business needs, which can quickly combine with other tools and connects to a local printer, basically they make sure that your business and team both work hassle-free with their software and are always there to help around the tech.
Connect with them today to avail their 14-day trial offer for cheque printing solutions and manage your business and finances efficiently by avoiding cheque fraud.
Book Your Free Demo Now!