How a Check Writing Company Can Protect Your Business
For more than a century, consumers and merchants made use of paper checks to handle large and small transactions. Processing a paper check took longer than paying by cash but offered an additional level of security because it made it possible for large sums to be transferred securely from one bank to another without public exposure of funds by either the buyer or the seller.
Of course, as the usage of checks became wide-spread, so did the numerous schemes designed by criminals to defraud others by passing bad checks or counterfeiting checks that could then be cashed against real bank accounts. To deal with the growing security concerns, many successful businesses began to hire a check writing company staffed by professionals who understand the minutia of banking regulations and the methods that are most effective at preventing fraud.
In recent years a series of technological innovations and environmental regulations have combined to create a new landscape for the check writing industry. Check writing companies now offer much more advanced services designed to reduce paper waste, increase transactional speed and clear funds faster through banks than ever before. How to cut a watermelon
The Office Of The Comptroller of Currency (OCC) for the Treasury of the United States government recently released an important memorandum on their website identifying some of the key changes taking place as check writing continues to evolve.
There are two significant points brought to light in the government memorandum that directly impact the importance of hiring a check writing company with a strong reputation. First, that check processing is in fact evolving as new regulations from the Check 21 Act go into effect. Secondly, and perhaps more importantly, that new methods of check processing are accelerating the clearing process used by financial institutions which in part also narrows the window for anyone interested in filing a dispute claim regarding a false charge.
The Check 21 ACT introduced sweeping legislative reforms designed to curtail the waste of paper caused by millions of checks being copied and stored in paper form by an assortment of financial institutions and regulatory agencies. It allows for banks to destroy original paper checks and to process the information electronically instead. The result is much faster communication of transactions between banks and a greatly reduced paper load overall.
The impact of Check 21 and other technological advances like Electronic Fund Transfer (EFT), according to the OCC is far greater efficiency with a significant drawback as well. The faster transfer of funds and new methods being used allow disputes to now be handled under the electronic fund transfer regulations rather than using traditional check writing rules. Generally, the new rules shift the risk of fraudulent checks written against a particular account toward the account holder and away from the processing bank.
That means your company faces significantly increased potential harm if the checks it is writing become compromised in any way by counterfeiters or scam artists. The best solution is to become better educated about the changing rules governing your paper and paperless transactions.