ICBA Issues New Guide for Members on Check Fraud

ICBA issues new guide for members on check fraud

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ICBA released a community banker guide to check fraud as part of its ongoing effort to address the growing problem.

New Guide: “Check Fraud: A Practical Guide to Altered, Forged, and Counterfeit Checks for Community Bankers” is designed to help ICBA-member community banks address check fraud, recover funds, and reduce losses.

Details: The guide:

• Explains how the laws and regulations governing checks assign liability for check fraud to individual banks involved in the issuance, transmittal, and receipt of checks.

• Lists various defenses banks may raise to limit liability for check fraud.

• Includes three appendices that cover the check fraud landscape, mechanisms for preventing check fraud, and the legal and regulatory regime governing checks.

ICBA Efforts: A recent Main Street Matters blog post from ICBA Vice President of Operational Risk and Payments Policy Scott Anchin discusses how ICBA is working to fight check fraud. ICBA recently launched a check fraud task force composed of about 40 community banks and state associations; offers member education, training, and resources on check fraud; and supports various collaborative efforts to address the issue.

ICBA Advocacy: In a statement for a Senate Banking Committee hearing earlier this year, ICBA said large institutions of first deposit are slow to reimburse community banks for unresolved checks and cited concerns with U.S. Postal Service security. ICBA has also said it supports the Treasury Check Verification System as a tool to curb Treasury check fraud, though it opposes a proposal to mandate use of the system.

Additional Resources: Amid a dramatic rise in check fraud, ICBA also encourages community banks to use:

• Nacha’s ACH Contact Registry, which includes thousands of check contacts.  

• The Treasury Department’s Treasury Check Verification System to catch canceled, duplicate, or other problematic Treasury checks at the time of presentment.

• Tips for filing Suspicious Activity Reports from the Financial Crimes Enforcement Network’s alert on fraud schemes.

• ICBA Community’s Fraud subgroup, which is the latest addition to the online platform and includes nearly 300 members dedicated to discussing fraud.

• ICBA educational resources such as on-demand webinars on check fraud and Treasury check fraud.

• ICBA’s Solutions Directory to identify payments, compliance, and security service providers dedicated to community banks, including ICBA ThinkTECH Accelerator program alums.

Read the Guide