Deluxe to Screen Checkbook Orders for Fraud

Deluxe Corp., the nation's top check printer, said it plans to launch a free check-fraud prevention service for its bank-industry customers.

The check-order screening service, to be available in early March, would help banks determine whether orders for checkbooks are based on valid accounts.

U.S. banks, which process more than 60 billion checks a year, lose about $1 billion to check fraud annually. And the number of checks written in the nation grew last year by about 2%, slower than the 6% of recent years but still a significant additional risk factor.

Deluxe's new service, relying heavily on the company's data bases, would alert banks of potentially fraudulent orders before checks are printed, said David Warfield, a manager of fraud prevention at St. Paul-based Deluxe.

"We are incorporating this into our existing product offerings," he said. "It's basically a new feature of doing business with us."

New or renewal orders for checks would be run through Deluxe's CheckSystem and Shared Check Authorization Network data bases.

The CheckSystem data base, a new-account and risk-account verification system, maintains account information supplied by over 64,000 branch offices, or about 72% of all financial offices in the nation, Deluxe says.

The Shared Check Authorization Network data base, known as Scan, is used by merchants for check authorizations at the point of sale. It looks for accounts with a history of check fraud based on data compiled from nearly 56,000 merchants across the country.

Bruce Brett, a senior vice president and former chairman of the American Banker Association's anti-check fraud task force, said other providers of verification systems ought to offer similar services.

He estimated that such systems could help the banking industry trim its fraud-related losses by as much as $200 million a year.u

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