Businesses using Remote Deposit Capture (RDC) should not assume that processing a check electronically somehow carries less risk. AFP's Annual Fraud and Control Survey has consistently identified checks as the dominant payment form targeted by fraudsters. When we think of check fraud, we often think of external cheats. But a recent article in Financial Ops titled "Fake Checks are Here to Stay Despite New Technology" by Glen Fossella, includes a discussion of the threats coming from within an organization.
Inside job fraud is easier to perpetrate in a larger department where multiple users are scanning and applying payments. The most common technique is when an employee scanning checks enters a check into the system then takes it outside the business and passes it to another fraudster. They, in turn, either cash it or deposit it and withdraw funds against it. Meanwhile neither the business nor the bank catches the error until it is too late.
Steps must be in place to minimize exposure and provide an accurate view of who is performing check capture. In addition, you must track what items are being captured, and how the documents are managed post-process. In other words, the business needs a complete chain of custody over scanned checks.
RP Solutions' RDC solution and our ExpertRPS remittance processing solution allow you to assign scanning privileges only to designated operators, provides audit trails of who's capturing checks, documents each data entry and edit, prevents duplicate checks and authenticates each user.
Post-scanning processes and controls must equally be well-defined, documented and practiced. Specifically, businesses must store checks securely and destroy them in compliance with company and bank requirements.