Magazine article American Banker

Check Fraud Fight Paying off for Imperial Bank of California

Magazine article American Banker

Check Fraud Fight Paying off for Imperial Bank of California

Article excerpt

California's Imperial Bank, after implementing aggressive check fraud detection measures, reduced its fraud losses by 77% in 1994, officials said.

The Los Angeles-based bank, the principal subsidiary of $2.6 billion-asset Imperial Bancorp, put in place two security measures that account for the majority of the savings, officials said.

One, called SafeChecks, is a secure check series that incorporates a number of safeguards to deter counterfeiting.

The other, called "positive pay," compares the customer's record of issued checks with the actual items presented for payment, which results in the bank's honoring only the authorized checks.

Imperial was prompted to institute the security measures because of a significant increase in check fraud attempts over the last several years.

In 1992, over half a million dollars in fraudulent items came into the bank, said Greg Litster, senior vice president. "We didn't catch any of it," he said.

Fraud attempts increased significantly in 1993, amounting to over $3 million.

The bank caught most of it, said Mr. Litster, but "too much got through"

With the implementation of positive pay and SafeChecks, check fraud decreased dramatically in 1994. The combination of the two security measures "makes it virtually impossible to take a hit on an account," said Mr. Litster.

Imperial has found that the majority of check fraud attempts are done with desktop publishing equipment.

To combat the problem, Imperial offers commercial customers SafeChecks, which incorporate a combination of safety features that foil attempts to produce counterfeits. …

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