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Paper Checks have been a part of American financial transactions for hundreds of years, but they are also vulnerable to fraud. Consider this: each check contains your business name, address, and bank account number, making them easy targets for criminals. Checks can be stolen from the mail or bought online, then made out to an unauthorized payee for any amount. In this article, we'll cover Positive Pay, a service that helps detect check fraud, and how it can benefit businesses of all sizes.

How Does Positive Pay Work?

Positive Pay is a valuable service that helps identify and prevent check fraud. Businesses upload a list of authorized checks into the system. When a check is presented for payment, the system compares it against the authorized list to ensure its legitimacy. Additionally, the system verifies the payee's name on the check against your records. Any discrepancies are flagged for approval, allowing checks to be cleared or rejected.

How Does Positive Pay Help Businesses?

Check fraud has been on the rise, with a 385% increase nationwide since 2020. In Idaho, over $40 million was lost to fraud in 2023. Enrolling in Positive Pay can help your Idaho business avoid losing money to check fraud, potentially saving thousands of dollars and preventing disruptions to your business bank account.

In addition to using Positive Pay, consider taking these extra steps to prevent check fraud:

• Limit the number of people authorized to sign company checks.
• Review canceled checks for alterations and forgeries.
• Complete reconciliations immediately after receiving your bank statement to detect discrepancies early.

Check Fraud Today

Despite the reduced use of paper checks, check fraud is still prevalent, especially for businesses that rely on writing checks for vendors, contract employees, utility companies, real estate transactions, etc.

Last year, the Financial Crimes Enforcement Network (FinCEN), a branch of the U.S. Treasury Department, issued an alert about a nationwide surge in mail theft for checks and other types of financial fraud and identity theft. Once scammers get hold of your business check, they can engage in the following types of fraud:

• Check washing: The check is altered with solvent to remove the ink (except for the signature), and different names and amounts are filled in.
• Counterfeit checks: Software is used to create a new false check that looks exactly like your valid business check.
• Check forgery: Using a valid check, your handwriting and signature are “forged” to make the check out to a fraudulent recipient.
• Check modification: One of the most common types of fraud is simply altering a valid check to change the dollar amount and recipient.

 Advantages of Positive Pay for Businesses

Enrolling in Positive Pay offers three primary benefits for your business:

• Fraud Detection: Identify potential fraud before it results in financial loss.
•  Avoid Disruptions: Prevent the hassle of having your business bank account compromised due to check fraud.
• Control and Security: Maintain control over the checks issued from your account, reducing financial losses from fraudulent checks.

To learn more and start with Positive Pay, contact Idaho Trust Bank or visit one of our full-service branches in Boise and Coeur d'Alene,

Founded in 1994 to provide exceptional, relationship-based banking service, Idaho Trust Bank offers personal, private, and business banking, wealth management, and investment management.

Idaho Trust Bank | Member FDIC

Investment Products are:
Not a deposit | Not FDIC insured | Not insured by any Federal Government agency | Not guaranteed by the Bank | May go down in value