In a move aimed at curbing the growth of fraud, the Arizona Bankers Association is leading a statewide campaign to use fingerprints to verify some checks.

Later this month, Arizona banks will begin asking noncustomers who present checks for cash to touch an inkless pad, then the check next to the endorsement. The inkless pad leaves no visible mark on fingers, but it will leave pronounced marks on paper.

"This is another vehicle to discourage fraud and therefore cut losses," said Gordon Murphy, executive vice president with the Arizona association.

"We are doing this on a pilot basis, and that will require some education. We emphasize that this will not affect the customers of the bank."

The Arizona association will be the focal point for the state's 28 banks and 777 branches. It will serve as an informational and educational source for banks and the public at large.

Check fraud has burned banks nationally for $815 million. Perpetrators increasingly exploit sophisticated desktop public and printing technologies to create counterfeit checks.

Although Arizona is not a hotbed for check fraud, it hasn't been shielded either. In the year ended in November 1994, Arizona banks reported $10.5 million in losses, according to the Federal Bureau of Investigation, which began tracking bank fraud in 1993.

"We do not lag the nation in those areas, unfortunately." said David Howell, an Arizona-based vice president with BankAmerica Corp.

Under the program, valid checks will go through the normal check collection process. Bogus checks that are discovered will lead to follow-up action with authorities.

Officials stressed that neither data bases nor records of fingerprints will be kept, which they believe will allay concerns of civil liberties groups.

Furthermore, the association believes fingerprint endorsements act as a significant deterrent, and cited the success San Francisco-based BankAmerica had with a similar program it started last year in Las Vegas.

BankAmerica's Las Vegas branches were presented with 56,000 checks. Although only 345 persons refused to yield their fingerprints, officials nonetheless credited the program with reducing fraud losses by over 40%.

"We are here (in Arizona) to get the pilot under way and evaluated," Mr. Howell said. "Based on our Nevada experience, we have every reason to believe that it will be well accepted and successful."

BankAmerica apparently believes in the strategy, having placed recent orders for thousands of the inkless touch pads for branches in California, Texas, and Nevada, according to officials with Signature Security Inc., Omaha, the makers of the $3 dollar inkless pads.

Meanwhile, Mr. Howell said the bank will also take a "hard look" at using fingerprints for those opening new accounts.

"We want to introduce it at this level first and see how acceptance goes to make sure we can work through any issues before we take further steps," Mr. Howell said.

For such a simple plan, however, the program does have critics, who pointed to the lack of a data base that can readily identity.

"When thieves figure that out, I'm not sure whether they will be real concerned with having their fingerprints shot," said Bruce P. Brett, a senior vice president with Signet Banking Corp., Richmond, Va., chairman of the American Bankers Association's check fraud task force.

Mr. Brett, who said he was generally supportive of any effort that reduced check fraud, wondered how Congress might ultimately gauge the privacy issues with required fingerprinting.

"I wonder when a court challenge is going to come that says 'This is invasive; you have no right,'" Mr. Brett said. "I'm not certain where all of the state legislatures or Congress would stand."

Robert H. Rasor, deputy assistant director of the Secret Service's financial crimes division, noted that the same technology that creates counterfeit checks is also used to create paper identification documents, which are increasingly becoming "absolutely worthless."

To prevent fraud, "the entire system has to convert to a biometric identifier," he said.

Brushing aside the privacy issue, he added, "The Big Brother concept is not really applicable to this process," noting that virtually all Social Security numbers and signatures are already on file. Most states require photos for driver's licenses as well.

"It's a not a matter of going out and getting new information," but one of using the information that's already there "to safeguard the economic system of the country," Mr. Rasor said.

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