The latest statistics on check fraud are in and the numbers are staggering. According to the Bank Administration Institute, check fraud increased more than 100% in 2022 while the volume of checks written increased only 8%. Things are expected to worsen in 2023. Industry experts now predict that check fraud schemes will result in $24 billion in losses at U.S. banks this year.
Fraudsters have been using checks to steal other people’s money ever since checking products were introduced in the 18th century. Thanks in part to color photocopiers, scanners and high-quality digital printers, fraud techniques have become more sophisticated in recent years. However, the attempts still generally revolve around three broad forms of check fraud:
Thankfully, security features are available that enable consumers and financial institutions to recognize a fraudulent check before the damage has been done. This blog will look at the various security features used to prevent the forging, altering and counterfeiting of checks.
Also known as abrasive ink, this is a white transparent ink that appears gray when rubbed with a coin. Some abrasion inks fluoresce when placed under a black light.
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Symbols can be printed on the document in white or transparent ink that become visible to the human eye when viewed at a 45° angle. The symbols can also be designed to fluoresce under a black light. These features are also known as simulated watermarks.
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A specially designed pen can be used to unveil an invisible mark or message, making a check authentication easier.
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Used instead of the dots of a conventional halftone screen, a screened image is made from simple letters or shapes and applied to continuous-tone images or photo art.
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A relatively simple modification to most check designs, a defaced voucher adds background printing (sometimes a logo or seal) to the blank areas of the document.
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Dual-image numbers use ink that contains two different components: black and red. The black component is visible on the front and is surrounded by a red halo. The red component penetrates the paper fibers into the document and is usually visible on the back of the sheet. Sometimes known as dual-component numbering or red penetrating numbers.
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A matched set of dies is used to distort the paper, resulting in a raised surface on one side of the document and a depressed surface on the other.
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Colored and fluorescent fibers can be embedded in the paper stock itself as it is manufactured, becoming part of the base sheet. The fluorescent fibers glow when exposed to ultraviolet light.
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Fluorescent inks are used in images or words printed on the document that are difficult to see by the human eye unless exposed to a black light. Long/short wave fluorescent ink is a colorless or transparent ink that fluoresces under an ultraviolet light source. The ink fluoresces two different colors depending on the wavelength of UV light – red at a short wavelength, and blue at a long wavelength. Also known as a fluorescing watermark.
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Holograms give the illusion of a solid object that changes appearance and sometimes seems to move when viewed from slightly different angles and sources of light.
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Lines are printed onto the surface of the document in a specially formulated gray ink that makes alteration difficult for the fraudster.
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The document is imprinted with a series of very small circles with differing dot sizes within them. This feature is used as both a quality control device and a semi-covert security image as microdots are not reproducible on most scanners and copiers. Also known as DQIs or dot quality indicators.
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Microprinting is a reduced line of type that appears as a solid or dashed line – until viewed under magnification. Characters, words or phrases are then distinguishable in the image.
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Most copiers and scanners, unless capable of very high dots-per-inch quality, will “see” the microprinting as a solid line.
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Ink can be used that changes color when viewed at different angles. The most current redesigns of U.S. currency utilize OVI.
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A special alphanumeric font can be used that makes modifying the payee and legal amounts fields of the check more difficult.
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Two or more ink colors are blended together in the printing of the check stock.
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A proprietary non-traditional font is used that varies the size and shape of the characters.
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A protective chemical coating is applied to the document that activates the word “VOID” in three languages when exposed to bleach, solvents or hypochlorites commonly used for washing check documents.
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Thermochromic ink changes color or disappears when warmed and returns to its normal color upon cooling. Also known as mood ink.
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A clear coating is printed over sensitive areas of the check to protect against alternation of those areas later on. The coating makes removal of laser printer toner extremely difficult compared to untreated paper.
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Void pantographs are warning messages hidden in printed pantograph backgrounds which are difficult to reproduce and provide effective protection against color copier fraud. A “void” warning message appears when the document is photocopied.
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Text on the face of the document informs the person accepting the check which security features should be present.
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Taylor has been a recognized leader in document security technology for decades and holds dozens of patents to prove it. We don’t just license document security features – we invent them. In fact, Taylor is on the X9B Financial Services Operations Subcommittee and actively participates in the development of the check security standards used by the financial services industry.
Many of the check fraud security features noted in this blog are available from Taylor. To learn about Taylor’s expertise with fraud prevention and document security technology, contact one of our document management specialists.