Question

To reduce fraud, some people argue that checks that utilize mechanical or electronic signature systems should not be honored. Why would you agree to this statement?

Answer 1

The checks that are electronically or mechanically signed are more prone to the frauds.

This is because this is most easy to sign the check electronically without the knowledge of the person whose signatures are electronically used.

However, this is not a good option to stop the payment of check that are electronically signed as this will hinder the use of the checks.

The only thing that is possible here is to take some the steps that will detect the fraud and save us from the fraudsters.

• All the checks whether they are unused and cancelled check they must be stored in a place that is safe and is not easily accessible.
• This is important to keep a track of checks and review them at a regular intervals.
• Define a payment limit on check. This means that the check that is over a certain limit should not be cleared in one go and upfront. There must be specific approvals in this case.