| Basic Reminders to Prevent Check Fraud |
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Checks are indispensable to aspiring entrepreneurs and established businessmen alike. Suppliers and lessors usually require post-dated checks or PDC's to cover installment payments, and issuing checks are generally more convenient and safer than carrying huge amounts of cash. However, just like in any aspects of business, vigilance is required. Check frauds are still prevalent. In many instances, the check you are holding, while valid, is worthless. Here are some basic tips to avoid being a victim of check fraud:
1. Guage the credibility of the issuer/maker. You cannot simply rely on the Bouncing Checks Law or BP 22, which now appears to be a toothless law. Follow your gut-feel and decide if the issuer/maker has more to lose when he runs from his obligation. 2. Include a secret mark/sign (like a harmless dot in a particular location) in all your checks. This may not be fool-proof, but it helps. Remeber that going to the PNP Crime Lab for authentication is a time-comsuming and costly process.3. Always reconcile your record at the end of each month. Banks send statements; if they do not, ask them. Many fraudulent activities can be prevented or minimized by this simple bookkeeping. 4. A check is different from Negotiable Orders of Withdrawal (NOW). They look the same, but a NOW document indicates that it is a NOW account. These are not checks. 5. As a rule, don't accept a second-endorsement check. Mr. A issues a check to pay Mr. B (payee), and Mr. B uses the same check to pay Mr. C. That is a second-endorsement check. It's so risky that banks, as a rule, do not accept these checks. 6. Be careful with crossed checks. Crossed checks have diagonal lines in one corner, usually at the top-left portion. It's good only for the one named as the payee and it can only be deposited by the designated payee with a bank where he has an account. 7. Again, always be vigilant. Simply because your check was falsified/forged does not mean that you're free from liability. If banks are able to show that the accountholder was negligent, the accountholder may shoulder a portion, if not all, of the loss.
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Newer posts:
- My failure in cash management --
- Financial Losses from Metro Manila Traffic --
- What is a Crossed Check? --
- No imprisonment in BP 22 or Bouncing Checks cases? --
- Christmas Shopping Tips --
Older posts:
- Trading down in a slowing economy --
- Jeepney Fare back to P7.50 minimum by November 2 --
- Stronger Peso ahead: P42.50:$1 at year-end --
- Credit Cards and Access Devices Regulation: Explained --
- Regulating the Business of Lending (Part 2) --
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