Executive Letter: Industry Resources for Understanding Check Negotiation and Fraud

By Rose Oswald Poels

As I meet and talk with bankers across the state, check fraud often becomes a topic of conversation as it remains a top issue and expense for WBA members. The volume of check fraud that is occurring is astounding considering overall check usage is decreasing. Unfortunately, much of the fraud occurs from mail theft whether it is at a consumer’s home, at a third-party mail carrier, or the U.S. Post Office facilities. I also know from my banker conversations that the amount of time bank staff spend in investigating and resolving claims involving check fraud is great, and that it can be frustrating when another bank in the chain is not responding in a timely fashion. There are many check fraud resources available from WBA and others; I thought it would be helpful to share those in this article so you and your staff can locate them in one place.

The following is a listing of resources that are meant to help educate staff on the rules applicable to check negotiation, identify where liability may lie regarding a fraudulent instrument, and directories meant to help banks handle check fraud claims more efficiently.

Directories:

• ABA online directory of contact information for banks that need to file a check warranty breach claim with another financial institution. It is searchable by bank name, city, state, or FDIC number, so banks can find the right contact at the institution to help resolve a warranty breach claim. The directory is available to ABA members and non-members.
• ICBA’s Solutions Directory to identify payments, compliance, and security service providers.
• Nacha’s ACH Contact Registry for banks needing a check contact at a counterparty.

Education-Related Resources: 

• Webinar: Check Breach of Warranty Blues
• ICBA Check Fraud: A Practical Guide to Altered, Forged, and Counterfeit Checks for Community Bankers
• 2023 WBA Negotiable Instruments Manual, UCC Rules Regarding Bank Liability and Responsibility for Wisconsin Banks
• WBA is your bank’s local training provider for ABA online training. The recently revised 30-minute Fraud Prevention course can be assigned to staff for $55/registrant. Interested in enrolling a group of 15 or more? Contact WBAeducation@wisbank.com for further discounting options.