Protecting the funds of the public is the highest priority for almost all the governments. The UCC that is the Uniform Commercial Code defines and regulates the responsibilities of all counterparts in the banking transactions and businesses. According to a statement of UCC, when certain situations arise, monetary loss and liability in a particular fraudulent transaction is split between various counterparts in a transaction and it is based on each of the party’s due negligence and diligence. In order to reduce the liability in an even of a fraudulent transaction, it is extremely important to have proper controls and checks in place.
Various advances in technology have successfully reduced the effectiveness of traditional fraud prevention techniques and have also enabled the various new forms of fraud. In the recent past various governments had relied upon the physical security features that were embedded in check stock in order to prevent the check fraud. These also included watermarks, graphical designs and unique colors. A remote deposit capture and advanced duplication technology have successfully reduced the effectiveness of all the physical measures in order to prevent fraud. The following tools were adopted by the banking industry in order to successfully prevent fraud.
Positive pay can be defined as a type of service for account reconciliation that is provided by all the prominent banks. By using this tool, the bank compares the checks that it receives for payment and compares it against the checks that have been issued by the government. In case a bank receives a check that does not match any of the information given in the records of the government, it will identify it as an item of exemption.
ACH Filters and Blocks
This tool stops any of the attempts that have been done by an outside entity in order to process an ACH transfer and removes all the funds from the checking account without any prior permission. The ACH blocks helps in preventing all the disbursements from an account.
The reconciliation tools allow the governments to see the transactions of any bank account that occur at various times throughout the course of the business day. This information may be accessed through the online systems that are provided by the banks and also through various other methods that include email, fax and direct transmission.
The UPIC is universal payment identification codes system that is used in place of the bank accounts of the government so that the account numbers of the governments aren’t disclosed.
Maintaining a safe bank account is extremely important. There are many types of frauds that can be attempted on a particular bank account. The above tools can be put to very good use by the bank account holders and most importantly by the banks themselves. The governments must also adopt useful strategies and techniques that can be very useful to protect the interests of the both the banks account holders and the banks. The banking system has become very modernized these days and preventing frauds has also become extremely easy.