numbering (in Canada, it's called halo numbering), because you can see the number on both sides of the check, and it makes alteration nearly impossible.
Very often, I encounter companies that are more interested in company image than inventory control. All they have is blank-check stock with their company logo printed on the paper, handsomely done in four color up on the left-hand corner. Everything else is blank.
I always say to the company representatives, "What if I put one of these blank pieces of paper in my pocket? How would you know I had it?"
"Uh, we wouldn't."
"Well, think about that," I say. "I've just walked out of your company with your check. I've got a laser printer at home. All I've got to do is run it through the printer."
If all your company is going to do is have its logo on blank-check stock, you should ensure that inventory check numbers are on the back of each page. That number will allow you to control your unprinted check inventory.
One of the most basic and effective security features you can build into your checks is called a "void pantograph," which is printed in the background of a check. The way it works is the word "void" is put into the background in a dot pattern that isn't visible to the human eye. However, when a check with a void pantograph is copied or scanned, the word "void" appears along with it.
Look closely at some checks and you'll see what are called laid lines, which are evenly spaced lines on the back of the paper. I always put them on checks I design, because if someone takes a razor and slices the check and alters it, I want to know about it. Enhanced laid lines were introduced in 1997 that are similar in intent, but they use unevenly spaced lines and afford an even higher level of protection.
Another relatively new security feature is thermochromic inks, which disappear or, in some cases, change color when they react to heat and moisture. They will actually fade and then reappear again. Thermochromic ink can be found on the back of a check in a pink strip beneath the endorsement. Or it can be found on the front of the check in a corporate logo or seal. Run your finger over it and the heat from your finger will cause it to vanish. Let go, it comes right back. Day after day, year after year, just touch it and it disappears and then comes right back.
Other worthwhile antifraud techniques include artificial watermarks, messages that are visible only when the check is held at a 45-degree angle and aren't picked up by copiers and scanners; warning bands, which are statements printed on checks that point out design elements to look for (no warning band is any good unless you add the words, "Do not cash," "Do not accept," or "Do not negotiate" before or after the warning); and microprinting, a technique where words or phrases added onto the check in letters so small they are legible only under a magnifying glass. It used to be that microprinting could only be done in a straight line, but circular microprinting is now possible so you can put messages in as logos, or pictures.
Companies always ask me, "Well, we buy two hundred thousand checks a year, or a million checks a year, or two million, how much more will these things cost me if I incorporate them?" The answer is very little. With that kind of volume, adding these features won't add much cost. One other thing that I tell businesses is you need to secure all of your checks, not just some of them. All the time, I encounter companies that use secure features in payroll checks and accounts payable checks, but not in refund checks.
"Why not?" I ask them.
"Oh, they're always for small amounts," they say.
Their policy should be the exact opposite. Payroll checks go to employees who you know. Accounts payable checks go to vendors who you know. But refund checks go to complete strangers. They're the checks most in need of protection. Unfortunately, what criminals do today doesn't enter a comptroller's mind until his company suffers a loss.
BUT DO THEY WORK?
Believe me, these features really work. In 1993, Imperial Bank in California hired me to redesign its company check. The bank was having big problems with check fraud - to the tune of $3 million a year. I came in, and working with the printer, gave them