DALLAS - In a response to the next generation of check fraud, the National Clearing House (NCHA) has introduced a registry of image-survivable security marks for the processors of electronic checks.
The registry will provide for much simpler verification of the various new image-survivable check features, a unique mark that will endure through the electronic processing and help spot fake images.
So far, Fiserv, John H. Harland Co., Cheque-Guard Corp., ASD Corp. and MediaSec Technologies are the only companies to register their safeguards.
NCHA was chosen by the Financial Services Technology Consortium to operate a registry to help combat fraud in the emerging electronic check marketplace.
The registry, which is housed at the website www.thencha.com, provides a single place for security feature providers to register their marks and for financial institutions on registered survivable check security features.
Registration of a security mark is free. NCHA is the largest settler of clearinghouse check volume in the U.S., providing processing and clearing services to 539 CUs and banks.
The move by NCHA came on the heels of an announcement by the Federal Trade Commission that it had received a temporary restraining order from a federal court here stopping an electronic checking firm from allowing users to access credit union and bank accounts.
The FTC charged that Qchex allows customers to draw electronic checks on accounts identified by the customer without verifying that the customer has the authority to write checks on that account.
As a result, con artists have allowed Qchex customers to fraudulently draw funds from hundreds of accounts.
A suit filed by the FTC claims that Qchex customers used the system to draw funds for non-existent goods and services or sophisticated overpayment schemes in which account holders were charged overpayments.
In many instances, unauthorized Qchex checks have cleared the accounts upon which they were drawn.
