IBAO warns brokers of increase in cheque fraud activity

Insurance Brokers Association of Ontario (IBAO) is warning brokerages to be on high alert in light of several recent reports of cheque fraud.
The incidents reported seem to have a common thread, an IBAO release says. They occur when the brokerage is shipping a payment to an external payee using window envelopes.
Another pattern is that the payee will notify the brokerage the payment did not arrive, and yet the brokerage's banking records show the debit transaction was completed.
IBAO suggests undertaking the following steps to prevent such incidents:
• do not use window envelopes to ship cheque payments;
• ensure cheques have serial numbers on the electronic codeline (commonly referred to as MICR);
• reconcile accounts on a daily basis and consider using electronic services available from your financial institution to assist;
• consider using electronic fund transfers instead of cheques;
• implement physical security by properly securing and restricting access to any computers used to issue cheques, especially ones with electronic signatures; and
• cheques, cheque order forms and articles of incorporation should be treated as carefully as cash and kept locked up with restricted access.