Cheque fraud is on the rise and local businesses need to know how to protect themselves.
That was the message from the Royal Bank’s Dianne Lazurko at a “Lunch and Learn” event March 10 hosted by Yorkton’s Rotary Club at St. Gerard’s.
“Part of regular Rotary meetings is we have guest speakers and we thought this was excellent information to share with the rest of the community,” said Rotarian Ray Bailey who organized the luncheon.
Lazurko explained there are several ways that fraudsters take advantage of businesses. These include stealing cheques and altering payee names or amounts, counterfeiting a business’s cheques.
She said this kind of fraud exploits weaknesses in business practices, such as the common process of only reconciling accounts monthly, at which point a company has no recourse to mitigate its financial losses.
Also, since the pertinent information to bookkeepers is the amount and the serial number of the cheque, discrepancies in payee name often aren’t caught until the real payee complains they have not been paid.
She said cheque fraud costs Canadian businesses $300 million per year.
Lazurko also offered some tips to help prevent cheque fraud including daily verification of cheques and accounts and “break-in-process” practices to prevent in-house fraud.
“You should always have two eyes on everything you do,” she said.
The best way to protect yourself, she said, was to shift from cheque-writing to electronic financial transfers (EFT).
Bailey thought it was an eye opening presentation.
“I was really surprised,” he said. “When I thought of cheque fraud originally, I thought it was cheques that you’re receiving either personally or in your business and I didn’t realize that often fraudsters take advantage of cheques that we write”
As a business owner himself, Bailey said the talk could impact the way his company does things.
“She certainly made us think of a lot of the practices that we have, how we pay vendors,” We do and we will certainly look at a lot more EFT transactions.