Way to guarantee validity of cheque payments
Cloning is the most prevalent form of cheque fraud in South Africa, but you can protect the integrity of your cheques by registering your cheque account details with a cheque-guarantee organisation.
Cheque-guarantee organisations, such as Cheque Guarantee Services (CGS), aim to enable businesses and consumers to use cheques without the risk of incurring financial losses by guaranteeing the cheques approved by CGS.
Julie Wiggins, the manager of sales, marketing and new business development at CGS, says fraudsters use information obtained from accountholders and stolen chequebooks to create cloned cheques, which members of crime syndicates use to buy goods and services.
If a bank fails to detect that it is processing a fraudulent cheque, the real accountholder carries the risk of paying for the fraudster's purchases until the accountholder queries the transactions with the bank.
In these cases, the retailers are responsible for the losses because they "sold" the goods and services without receiving payment.
If you have registered your cheque account details, Wiggins says, CGS will flag the numbers of missing or stolen chequebooks on its system.
When one of your missing cheques is presented at a business that is a CGS client, a cashier will enter information about the cheque in a point-of-sale device, Wiggins says. This device will transmit the information to CGS's database.
The database will process the information and will either guarantee or decline to guarantee the cheque. CGS's database contains information on 1.8 million individuals and 300 000 companies.
Wiggens says CGS has an inhouse fraud and forensics department that works with the South African Banking Risk and Information Centre. The centre is a joint initiative between the banking industry and the South African Police Service that tracks down fraud syndicates.
Carl Martin, the manager of operations at CGS, says the company is not a credit bureau and does not give out personal information or credit ratings to its clients. CGS provides a service to retailers and other organisations on the validity of a cheque that is presented to their cashiers as payment.
CGS not only flags stolen or cloned cheques on its system, but also the details of cheques whose accountholders have not honoured their cheque payments in the past.
To register your cheques with CGS, phone the call centre on 0860 123 247 and ask to speak to the call centre manager, Cathy van Rooyen. There is no charge for registering your cheques with CGS.