Soon after criminals learned to counterfeit currency, they turned to stealing checks, or even just account numbers, and printing false checks — putting an evil new spin on the term “making money.”

Unfortunately, this virtual counterfeiting is frighteningly easy to do. Fortunately, financial institutions have developed ways to stay a few crucial steps ahead of criminals through new preventative measures that successfully protect customers’ assets, information and privacy.

A realistic appraisal of the hazards is a sobering experience.

Check fraud is a multibillion dollar problem that costs all banking customers. In addition to assets looted outright from accounts, fraud victims must also take time to file police reports, bank forms and affidavits, retrieve copies or originals of fraudulent checks, open new accounts and obtain new checks.

To create all this expensive, time-consuming havoc, criminals can utilize easily available equipment as tools of a low-budget trade in fraud and deception. Every office and most homes have scanners, computers and color printers; even the office supply store has become today’s new bag of burglar’s tools. With a blank check stock and a check-writing software program, criminals can create virtual financial entities, accounts that don’t exist and electronic keys to others’ assets.

The Internet can also supply authentic-looking personal identification documents that criminals may need to utilize the bogus checks they produce. Believe it or not, using a Web browser to search for “fake id” facilitates this phony credentialing with amazing ease.

Some of the best weapons against such check fraud are already in visible and effective use at bank branches.

First of all, frontline bank personnel are carefully using their face-to-face acquaintance with customers to detect imposters, transactions that don’t make sense or that break familiar patterns. Management is further tightening this important verification process through special training and by emphasizing security.

They are also making allies of their customers in a similar training process, encouraging tighter check security measures such as separating responsibility for handling checks so that reconcilers are not signers and vice versa, urging them to destroy unused checks and to use secure check stock with both overt and covert features.

Banks are also pioneering new techniques and new technology to combat both paper-based and electronic check fraud. These powerful tools include Positive Pay and electronic payment authorization (EPA). Many banks offer these preventative measures through Internet-based cash management systems. For instance, KeyBank’s Key Total Treasury application safely and securely manages cash and information reporting through a single online portal.

Positive Pay is a boon to organizations, particularly when same-day reporting is offered. The same-day processing and early reporting of check clearing totals on the day of presentment gives customers more control and added peace of mind. Specifically, here’s how a same-day Positive Pay system works.

A customer electronically transmits check issue information to the bank as it issues checks; this information automatically goes into the bank’s reconcilement system. As checks come in, mismatched items go into an online daily report that is sent back to the customer for review and decisions. By midafternoon the customer can retrieve the daily mismatch report, and has until their bank’s deadline to stop payment on any item it does not want paid. Best of all, these steps all function online.

One proactive step becoming more prevalent among organizations is the use of the automated clearinghouse (ACH), which helps protect an organization’s electronic transactions. In fact, ACH use jumped 16 percent last year to more than 7.9 billion transactions and more than $22 trillion moving through the ACH network.

Another important layer of security is electronic payment authorization (EPA), which allows organizations to block or filter ACH transactions to their accounts.

These authorizations can take two forms. An EPA “block all” will block all ACH debit activity against an account, and an EPA filter will block only those that are unauthorized.

With an EPA filter, a customer notifies the bank which entities are authorized to issue ACH debits against the customer’s account. After a thorough review for mismatches, any seemingly unauthorized ACH items are entered into a reject/retry report for the customer’s online review and decision.

Positive Pay and EPA are intended to provide customers additional security to protect assets, information and privacy. Customers can securely and conveniently manage cash and information from any computer with Internet access, any time — and stay a step ahead of the criminals.

To ensure security measures are staying ahead of the curve, organizations are encouraged to conduct regular assessments of their fraud prevention controls.

(Editor’s Note: Stephanie Clarke is Vice President of Corporate Security for KeyBank’s Western Region. She may be reached at (253) 305-7961 or at Stephanie_a_Clarke@keybank.com.)