With the huge expansions in banking transactions consequent to the transition of banks to mass banking, and large-scale computerization, both have played a major role in the perpetration of the frauds. Advances in computer hardware and software underly most of the increase in cheque frauds primarily the development of low-cost, high-quality color printers and scanners, along with desktop publishing software, that makes it relatively easy to alter legitimate documents or create counterfeit cheques virtually indistinguishable from the real thing. Fortunately, computer technology is now beginning to provide some innovative tools to help combat the opportunities for cheque fraud it helped to create.
There is no doubt that technology can prove very helpful in fraud detection and prevention, but fraud takes on many forms to be handled with any "single" application or approach. Cheque fraud has been across the globe since the ancient time, but the pace of changing schemes has been very slow for banks to react with very good proceduresmany of them still manual. Traditional schemes, such as "paper hanging" (where fraudsters write cheques purposely on bad accounts or non-sufficient funds, stolen cheques), and "counterfeiting" have been joined by attacks on newer forms of payment (such as, pre-authorized "demand drafts"). Or, fraudsters create "phony" pre-authorized draft accounts and draw on bank accounts.
If there is somewhat positive news in all this, it is that technologies keep inventing "new" forms of protection to let banks gain equilibrium. Traditional measures, such as cheque stock security features, or two-dimensional bar codes are joined by databases (for keeping tabs on the bad guys), fraud features in cheque imaging software for spying out irregularity, and screening software, to name a few. |
