The introduction of Image Survivable Features (ISFs) on cheques has helped to reduce the amount of cheque fraud perpetrated. The trade body UK Finance reported that gross losses in 2021 fell by 48pc to £6.4m, in a year when the value of all cheque cleared was down by just 12pc. ISFs enable the cheque data to be captured and encrypted within a unique coded number (UCN) or barcode that can be applied to the original paper cheque, thereby ensuring the validation of the item when the image is scanned within the Image Clearing System (ICS).
A providers of ISFs on cheques, the TALL Group of Companies, says that it’s hearing of more benefits from its banking customers, and development partner of the patented UCN Plus enhanced ISF, DIA Kappa, that one of the key issues the banks and clearing service providers still have when processing cheques for payment is the amount of time and effort involved when a cheque is flagged as ‘suspect’ when its image arrives at the switch, and then the paying bank has to get involved to check whether it is good to pay or not.
This checking can involve lots of to-ing and fro-ing between the clearing service provider and the bank, the banks’ relationship managers talking to their customers, having to make a decision in a short time, and all the costs, administration, effort and resource required to get this done correctly.
However, if a cheque includes the UCN Plus enhance ISF, none of this checking is required., the firms say The data in the encrypted QR (Quick Response) Code either matches the variable information on the cheque, or it doesn’t. If the data does not match, the cheque has been altered or is a counterfeit, and is immediately unpaid. The UCN Plus QR Code covers all codeline and variable data, including payee name, amount and date from the printed cheque.
Developed for corporate or ‘Special’ Computer Cheques, the UCN Plus is added at the time of cheque infilling thus capturing the additional information from the face of the printed cheque not included in a standard UCN.
UCN Plus replicates the benefits of paper-based ‘Positive Pay’, by providing an automated, fully ‘hands-off’ version for the ICS, whilst removing the burdensome costs of data file preparation, transfer and any associated manual administration.
While personal cheques are afforded protection with the standard UCN ISF that is applied at the time of printing of the cheque paper stock, the enhanced ISF UCN Plus applied when infilling the cheque has greater significance to the banks, the clearing service providers, and the fraud prevention community as it applies to typically higher value corporate cheques with a greater risk of cheque fraud.
Danielle Greenland, Account Delivery Manager at DXC said: “Any enhancements which help reduce cheque fraud are supported by DXC Technology. Our view is that image ISF’s in general are very beneficial in cheque fraud detection and reduction terms, particularly in an ICS world.”
And Martin Ruda, Group Managing Director, the TALL Group of Companies, said “It’s really positive to see both the banks and clearing service providers recommending corporate customers take full advantage of the UCN Plus ISF to fight against cheque fraud, considering the high value of some transactions undertaken. It’s a simple yet comprehensive security feature to assist customers of participating banks who want to infill their own corporate cheques in-house, or through one of our dedicated cheque bureau services. The UCN Plus provides an ideal way of meeting bank-recommended cheque fraud prevention measures by the addition of an encrypted enhanced ISF. As more and more of the UK clearing banks are making ISFs a requirement then the UCN Plus offers additional security above and beyond the simple UCN, providing additional protection against potential cheque fraud.”
The introduction of ISFs has given the ‘good old dependable cheque’ a boost as a secure payment method. According to the UK Finance: Annual Fraud Report, cheques are one of the safest forms of payment now in the UK and, despite declining usage, is a preferred payment for many in society.
The continued use of the cheque is likened to usage of cash and a recent communication from Richard Fuller, the Minister responsible for policy at HM Treasury confirmed that “cheques remain an important part of the UK’s payments landscape. While there has been a decline in overall cheque volumes, I recognise that they continue to be used by many individuals, businesses, charities, and other voluntary organisations. I am not aware of any current demands to withdraw cheques as a payment method. In fact, in 2015, HM Treasury introduced legislative measures to allow UK banks and building societies to introduce ‘cheque imaging’. As a result, consumers, charities, and businesses receive their funds more quickly and have more certainty about when funds leave and enter their account. Cheque imaging has also enabled banks to allow people to pay in cheques via their smartphone or tablet.”
For more see https://tallgroup.co.uk/tall-secure-print-payment-solutions/products-and-services/.
