A. Issuing Checks: You should only issue a check or demand a draft if you have the appropriate authorization. Ensure availability of funds to minimize bank fees for yourself and the "payee" (recipient of the check/draft). Validate the ID of the payee before issuing a check. Similar to using a Credit/Debit Card, once you pay by check your payment information has been passed to the payee and can be used without your authorization.

B. Accepting Checks: When accepting a check you should ensure that it is based on a sound understanding, an agreement between you and the "payor" (check issuing party) and the payor's express authorization to cash the check. Checks sent to you unannounced, with poor or suspicious justification, or uncertain payor consent should be handled with great care and only be deposited AFTER all uncertainties have been resolved. If you receive a check/demand draft for the purchase of a good or service, ensure express consent of the payor of the check, validate the customer’s identity (to your best ability), and only deliver goods/services to unknown or first time customers after the check has cleared.

C. Review Bank Statements: Regular and timely review of bank statements is one the safest ways to avoid loss from check abuse or fraud. Once you detect an unauthorized transaction, you should immediately contact your bank to refund any unauthorized amounts, close the account and open a new bank account.

D. Bank Clearing: Financial institutions and banks carry a great burden and responsibility to avoid loss for their customers/account holders. The ID validation of depositors and account holders at point-of-deposit/cashing is the single most critical event during the check clearing process. Disputes and damages from fraud occur often as a result of inadequate ID and customer validation. We recommend that banks exercise greatest care with new or unknown customers and those with poor financial history, add hold periods before releasing funds, and avoid unjustified exceptions from strict policies. You as a bank customer should instruct your bank to promptly inform you in the event of any demand draft activity or other suspicious activity on your account, unless previously authorized.