Corporate Check Fraud Protection Manual: Compliance, Liability, Positive Pay

Check fraud is a pervasive problem for companies of all sizes. Banking regulations require banks to make funds available with 2 days for local checks and within 5 days for out-of-town checks.

Because of the regulations, and competitive pressures to accelerate availability, banks are increasingly making funds available for checks before those checks have actually cleared. This situation makes it easier for criminals to successfully negotiate fraudulent checks.

Another reason for the recent increase in check fraud is the availability of low-cost, professional quality electronic publishing and copying technology. Using color copiers, laser printers, scanner and desktop publishing systems, counterfeiters can easily produce excellent copies of checks. Today, most check fraud involves the use of electronic image-processing equipment to produce forged checks, duplicate checks, or checks with altered dollar amounts.

The Corporate Check Fraud Protection Manual is designed to assist corporations with internal procedures, checklists and strategies that will help you detect and prevent check fraud with the goal of reducing losses. This one-stop reference guide contains everything you need to know about detecting and preventing check fraud, complying with applicable regulations, and using positive pay.

The manual covers:

• Understanding checks and check fraud
• Forgery of the drawer's signature
• Forged indorsements
• Alteration of the check
• Notice of breach of fiduciary duty
• Payment over a restrictive endorsement
• Check kiting
• Positive pay

Each chapter contains internal procedures for reducing risk of the most common check fraud schemes, regulatory materials with case law discussion, a checklist, and discussion points for review exercises.

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About the Author

Clayton P. Gillette is a co-author of Payment Systems and Credit Instruments, a leading casebook on this subject, and the author of multiple articles concerning payments law and other areas of commercial transactions. He is the Max E. Greenberg Professor of Contract Law at New York University School of Law, where he teaches commercial law. Professor Gillette has also served as an expert witness and consultant in matters involving the use of fraudulent negotiable instruments.

Professor Gillette received his B.A. from Amherst College magna cum laude in 1972 and his J.D. magna cum laude in 1975 from the University of Michigan School of Law. After graduation from law school, Professor Gillette served as a clerk to the Honorable J. Edward Lumbard of the United States Court of Appeals and was associated with the Manhattan office of Cleary, Gottlieb, Steen and Hamilton. He has served on the faculty of the University of Virginia, and prior to that was Associate Dean, Professor of Law, and Warren Scholar in Municipal Law at Boston University School of Law. He has also served as a visiting professor of law at New York University School of Law and the University of Michigan School of Law.

You might also be interested in:

• Pratt's Corporate Treasury Management Manual
• Brady on Bank Checks: The Law of Bank Checks
• Clarks' The Law of Bank Deposits, Collections and Credit Cards
• The Law of Electronic Fund Transfer Systems
• The Law and Regulation of Financial Institutions
  

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