By Staff Reports
(DGIwire) – In this age of electronic transactions, the risk of criminal activity is rising in one area we might not expect: bad checks that potentially choke retailers’ profits. Although this paper-based predicament could seem like a throwback to a bygone era, consider this statistic from the National Automated Clearinghouse Association: 15 billion to 18 billion checks pass over store counters each year. Although there are no hard numbers on are how many are bad, even a small percentage could cause a big dent in businesses’ bottom line.
With this in mind, here are some ways merchants can protect themselves:
- Require valid identification. This is the first line of defense against bad checks. Besides state-issued driver’s licenses, other acceptable forms of identification are auto registrations, passports or photo IDs from a recognized place of business in the community.
- Get information about the customer. Although a good ID is vital, it’s not enough. Write the following information on the back of the check: home address, home and business phones, employer’s name and address. This information will be needed to contact the customer after a check bounces, or for formal collection procedures. Many states require such information for prosecution. Finally, if a check authorization service is used, it will require such information to be written down. If it isn’t, the bounced check won’t be reimbursed.
- Compare the ID with the customer. It’s important to be certain that the customer is the person indicated by the ID. Remember, the driver’s license gives two visual clues to help: the signature and the photo. First, get a “live” signature. The customer should sign the check in front of a salesperson, who should compare the signature with that on the driver’s license. This eliminates the possibility that the check was stolen after it was signed by its true owner. If the check is already signed when it’s presented, ask the customer to write a new one, or to sign another piece of paper so they can be compared.
Although taking such precautions can do much to prevent merchants from getting burned, even this sometimes isn’t foolproof. This is especially true in an era when obtaining a fake ID that looks like the real thing has never been easier. This underscores the need for deterrents such as the one currently being deployed by Intellicheck Mobilisa, the company that created ID Risk Check™, quickly becoming a premier fraud and risk management tool. ID Risk Check offers ID validation and authentication services, along with fraud risk controls. Tied in with proprietary analytical models, ID Risk Check is designed to reduce fraud and minimize identity theft.
Dr. Bill Roof, CEO, Intellicheck Mobilisa’s CEO, says, “Most merchants allow consumers to choose their form of payment, and many still want to pay with their checkbooks. This is fine in most cases, but fraud occasionally surfaces and that’s what our technology is designed to stop.”