Magazine article American Banker

Deluxe System Sniffs out Check Bouncers

Magazine article American Banker

Deluxe System Sniffs out Check Bouncers

Article excerpt

Units of the check printing company Deluxe Corp. have announced a service that allows banks to screen new accounts with a data base of bad checks written to major retailers and supermarkets.

The service links ChexSystems. an electronic listing of checking account abusers gathered from information supplied by banks, and the Shared Check Authorization Network (Scan), a data base of bounced checks supplied by retailers.

Deluxe, based in Minneapolis, acquired Scan two years ago with the intention of linking the two subsidiaries' data bases.

United Against Fraud

The service is one of the first examples of cooperation between retailer and banks to fight check fraud, which bankers believe has mounted since Regulation CC mandated accelerated funds availability.

Check fraud in California alone amounted to between $50 million and $75 million in 1992, according to a spokesman for Electronic Transaction Corp., which operates the Scan network.

"We encourage banks to use [these types of] networks," said Sally Shawen, assistant director of operations and automation for the American Bankers Association, which last month sponsored a meeting between retailers and bankers to discuss ways to combat check fraud.

At the meeting, retailers complained that branches do not use these networks to screen applicants for new accounts, Ms. Shawen said. "We hope branch people are following procedures as they are supposed to," she said.

ChexSystems, also based in Minneapolis, competes with other account verification networks, such as Telecheck, based in Rockville, Md. …

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